Good Faith Estimate

Written By
Paul Tracy
Updated November 4, 2020

What is a Good Faith Estimate?

A good faith estimate is a written estimate of the fees due at closing for a mortgage.

How Does a Good Faith Estimate Work?

The Real Estate Settlement Procedures Act (RESPA) requires a lender has to provide a written good faith estimate to a borrower within three days of the borrower applying for a mortgage.

The good faith estimate details the cost of the inspection, title insurance, attorney fees, escrow requirements, documentation fees, loan origination fees and other items associated with the cost of settling the loan and performing the transaction. The estimate itself is written on a standardized form to ease comparability and clarify disclosure.

The Department of Housing and Urban Development provides a sample good faith estimate form here.

Why Does a Good Faith Estimate Matter?

Closing costs are expensive -- almost 10% of the loan amount in some cases -- and different lenders charge different fees. A good faith estimate allows people to shop around, prevents borrowers from being surprised and prohibits lenders from arbitrarily changing their fees during the transaction.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Good Faith Estimate.
Be the first to ask a question

If you have a question about Good Faith Estimate, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Good Faith Estimate, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Good Faith Estimate

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms