Are good faith estimates binding?
On One Hand: Mortgage Origination CostsAs of January, 2010 good faith estimates legally bind mortgage originators to the estimated price given to a prospective borrower, states the website, Real Estate. Costs such as taxes, fees and origination costs cannot deviate from the time of the good faith estimate to the actual closing date, states Market Wire.On the Other: Third Party FeesSome mortgage closing fees don’t originate from the lender. Lenders must estimate these fees, however, to give the borrower an accurate idea of closing costs. These fees often charged by third parties include title insuring and attorney closing fees, states Market Wire. For these fees, lenders have a 10 percent error limit, which means these third party fees can cost, at most, 10 percent more than the estimate.Bottom LineWith an exception for third party fees, good faith estimates represent a legally binding closing amount.
