Understanding Good Faith Estimate for Home Loans in Texas

Home Mortgage Loan Types in TexasThe state of Texas attracts settlers from across the United States. Apart from its enchanting landscapes, beautiful coast and care-free lifestyle, the easy home buying facility in Texas is also a major attraction.
Home buyers in Texas often look to buy a beach facing condo, ranches and other types of houses with attractive mortgage terms. A wide range of mortgage options in the state provide solutions to potential home buyers to get the required financing.

Choosing a mortgage company that facilitates on behalf of home buyers looking to obtain convenient home loans in Texas is your first step. As purchasing a home is a critical investment, it is important to find a home mortgage program that offers terms that you are comfortable with. However, prior to that you need to know about the estimated costs that you’ll need to carry in order to buy the property. You can obtain an estimate by acquiring a Good Faith Estimate (GFE) worksheet where all of the required costs are clearly explained. This is a worksheet that every lender is obligated to provide to their borrowers before they apply for a home loan.

Overview of the Good Faith Estimate
Your mortgage company needs to provide a GFE within three business days after receiving your application. A GFE provides a summary of the loan that helps you compare offers, and make a wise and informed home buying decision. The information that it provides includes:

  • The loan amount, its duration and interest rate
  • Initial amount to be paid for principal, interest and mortgage insurance
  • Future increase in the interest rate
  • Prepayment penalty (if any)
  • Loan origination charges

By going through the information mentioned in the GFE, you will be able to figure out your best home loan options. A GFE also contains important dates in which the terms become applicable. This is particularly important for borrowers who take out a home loan with a floating interest rate. However, if your interest rate is locked, the GFE would mention the date that you have to accept the offer by in order to avail the locked rate.

Besides knowing about costs, there are various other key determining factors such as your credit score, assets, type of property, etc.

When searching for a home mortgage in Texas, many home buyers nurture several pre-conceived notions. For example, they think of applying to the same old traditional lenders such as banks and financial institutes. However, finding a reputed mortgage company that provides guidance on flexible mortgage programs will solve all of your dilemmas. Such a company can assess your current financial condition, credit history and affordability, as well as suggest the best suitable loan options. Hence, search for a mortgage firm in which you’ll have a long-term association with and one with who you will receive the best continuous support.

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