1—What does “Good Faith Estimate” mean in regards to buying a new home?
A Loan Estimate (formerly called a Good Faith Estimate) gives the buyer an idea of the costs associated with the purchasing of a home. Working with luxury buyers in neighborhoods like Superstition Mountain Golf and Country Club, a Good Faith Estimate is important because costs and interest rates for “Jumbo Loans” or non-conforming loans can are different than those of a traditional conventional loan. Also even when a buyer is paying cash for a property the costs of acquiring it can be very important to the buyer.
2—Who provides this info to homebuyers?
This information disclosed on a Loan estimate is usually provided by the loan officer, as it is lender generated form. The Loan Estimate is a lender generated form based on loan type that will show loan type, down payment amount and an estimated interest rate. In some cases the will have a copy from the lender. These numbers are an estimate of the costs associated with obtaining the property. These should include loan cost (if there is a loan), title fees, HOA fees associated with the transfer of the property, capital improvement costs, disclosure fees, monthly HOA fees and any membership fees associated with the property. Cash transactions usually have fewer fees, Luxury communities like Superstition Gold and Country Club have additional optional fees associated with golf and social memberships. Title officers often participate in creating an accurate cost if the transaction is a cash transaction.
3—Why is it important for homebuyers to have a Loan Estimate?
“Regardless of the price point of the home, getting a loan estimate is essential in evaluating the true cost of acquiring a property”
4—Do all new homebuyers typically get as part of the process, or are there situations where they may not get this info?
Not all realtors representing buyers feel comfortable providing estimates, of costs, but providing this important data alleviate any surprises at the close of escrow and assure that any assistance a buyer may wish to ask a seller for with costs can be done it an initial offer. In working the luxury market often buyers are more concerned about negotiating a good offer price than the costs associated with the closing.