Line 102 and 1203
Rarely used.
Line 1302 * Pest Inspection Fee
This depends upon local need. If required by lender see. Always required on VA loans.
Unnumbered Comparison To Broker (Not Paid Out Of Loan Proceeds)
This is the "Yield Spread Premium" paid by the lender/investor to the mortgage broker, if not for the YSP you would have to pay this much additional at closing. YSP is much maligned but great for the consumer, See the article: A Consumers Guide To Mortgage Brokers And The Evil Yield Spread Premium
.Line 901 *Interest for __ days
Mortgage interest is always paid in the arrears, meaning you pay the interest after you use the money, but all mortgage payments are now due on the first of each month. It takes two to three weeks for the lender to enter your loan in their computer systems, so they start your payments on the first of the second month following closing, this means your accrued interest could be for 29 to 60 days. At closing you will prepay up to 30 days interest so that your first payment will have no more that 31 days accrued interest. See the article: Explaining Pre-Paid Interest
Note: It is legal for a lender to only disclose one days prepaid interest on the initial estimate. A one day disclosure reduces the total estimate closing cost and the APR, but at closing this fee will be what it will be, and the unprepared consumers could find they need hundreds to thousands more money to close. It's better if this estimate is high, I recommend 25 days, I don't trust anyone who's initial estimate is for less than 15 days.
Before closing you may be able to request a payment the first of the next month, if your closing will be in the first week (normally not later than the fifth) of the month, in which case you could have a credit instead of a large charge.
When refinancing it may be possible to "skip" two payments. This is done by skipping your last payment on your existing loan (it will be included in your pay off) and then putting off your first payment on the new loan by prepaying up to 31 days interest at closing. This is often handy, but it's not free you pay for the money you're using. The down side is you may have to pay your old lender a late charge, and if closing is delayed you will have to make the skipped payment or go 30 days past due at which time you may no longer qualify for the new loan!
This is eddied copyrighted material from "Get The Money / A Consumers Guide To A Successful Mortgage Application" republished here by the author with permission of the publisher. Watch for the next part and then "Truth In Lending."
Bill
William J Archambault Jr
The Real Estate Investment Institute
http://www.reii.org
Links:
Part 1Good Faith Estimate Part 1
/blogsview/44523/Good-Faith-Estimate-Part
Part 2 Good Faith Estimate Part 2
Part 3 Good Faith Estimate Part 3
Bill
William J Archambault Jr
The Real Estate Investment Institute
wja@reii.org Cell 832-259-7078, Houston 832-582-8415, Las vegas 702-516-1569
From my past: GRI 1975, FLI 1974, Catalyst from a client 1974 an agent that makes things happen, REII, The Real Estate Investment Institute 1995.
©William J Archambault Jr ©The Real Estate Investment Institute ©REII
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Get The Money
A Consumers Guide To A Successful Mortgage Application
William J Archambault Jr
author of:
One House At A Time / Finding And Buying Single Family Rentals
Flipping For Fun And Profit
A Baker's Dozen / A Real Estate Anthology
Available from:
The Real Estate Investment Institute
http://www.reii.org wja@reii.org