What’s Negotiable on a Good Faith Estimate?

A beautiful question I found in the list of keywords that people searched on and found my site for today:

What is negotiable on a Good Faith Estimate?

First - what’s a good faith estimate? It’s an estimate of costs that your lender prepares so that you can better anticipate closing costs and more easily compare loans. A ‘GFE’, we we call it, details out lender costs, estimated title and escrow costs, recording costs, and whatnot.

So when your lender presents you with this good faith estimate, what parts are negotiable?

Well - lots of it. At least, the parts that your lender has control over. Your lender isn’t in charge of the title and escrow and recording costs, they’re just providing those estimates to you more or less as a courtesy. So your lender can’t do much for you with those.

But what they can negotiate are their own fees and rates. Tom Vanderwell of Straight Talk About Mortgages has this to say:

When you are shopping for a mortgage lender, you need to look at the entire package, fees and rate. If you find two lenders who are at the same rate, but one has $200 more in fees, that’s when you have to either decide to go with the other one or negotiate it down to match the fees.

Just remember - when you get a home loan, you’re paying your lender to perform a service for you. And it matters whether that person has expertise or not - if they can get the money to escrow on time, if they can help you select the right loan based on your needs, if they can reduce your stress during the entire process. Those things have value too.