What is the purpose of the Good Faith Estimate?

The Good Faith Estimate serves a crucial function in the mortgage process by providing borrowers with an estimate of the costs associated with obtaining a mortgage. This estimate includes various fees, such as loan origination fees, title insurance, and other closing costs, giving borrowers a clearer understanding of the financial obligations they will face during the loan transaction. By offering this transparency, the Good Faith Estimate enables borrowers to compare different loan offers and make informed decisions regarding their financing options. Additionally, it emphasizes the lender's commitment to acting in good faith, as the estimate aims to reflect the actual charges the borrower can expect at closing. This tool is essential in fostering trust and clarity in the lending process, ensuring that both parties are aligned in their expectations regarding costs.