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A Good Faith Estimate (GFE) is something that you are to receive within 3 days of a mortgage application. These are standard forms, so they are intended to be used to compare different offers (or quotes) from different lenders or brokers.

The GFE lists an estimate of what the total costs will be to get your mortgage. It is a long list, and the charges can be confusing.

The key thing to remember is that it is only an estimate. Your final costs may be different – sometimes very different.

These quick explanations will help you understand many of these costs, and how you can save on them. Keep in mind that some lenders or brokers add their own custom fees to the GFE.

The fees come in these basic categories:

Loan fees
Fees to be paid in advance

Reserves
Title charges
Government charges
Additional charges

The following is a list of the typical charges, with advice on how to lower this if you can. Each charge starts with a number – the same number is the number of the charge on your GFE. This makes it easier to find the charges you are looking for on your GFE.

ITEMS PAYABLE IN CONNECTION WITH LOAN:

801 - Loan Origination Fee

This fee is a charge for originating or creating the loan

802 - Loan Discount
This is an upfront charge paid to the lender to get a lower interest rate – same as “buying the rate down”
803 - Appraisal Fee
This is the cost of the independent appraisal. It is usually paid by the buyer
804 - Credit Report
This is the cost of the credit report
805 - Lender’s Inspection Fee
This is the lender’s cost of inspecting a property – some may double check the appraisal provided by an independent appraiser
808 - Mortgage Broker Fee
This is the upfront charge that a mortgage broker charges. Brokers can also earn a “rebate” from the lender which is not listed here
809 - Tax Related Service Fee
Lender fee, usually small, for handling tax related matters

810 - Processing Fee
This is the charge for processing the loan – collecting your application, running credit, collecting pay stubs, bank statements, ordering appraisal, title, etc.
811 - Underwriting Fee
This is the cost of the loan underwriter (approver)
812 - Wire Transfer Fee
This is the cost of wiring the money around, which is usually done by escrow

ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE

901 - Interest for days X $ per day
This is your prepaid interest for your mortgage loan
902 - Mortgage Insurance Premium
This is the prepaid mortgage insurance premium, if you have one. This is the insurance premium some lenders charge for loans with little equity/
903 - Hazard Insurance Premium
This is your home’s hazard insurance being prepaid
905 - VA Funding Fee
This is the Veterans Administration funding fee, which is something you will not incur unless you go through a VA program

RESERVES DEPOSITED WITH LENDER

1001 - Hazard Insurance Premiums # months @ $ per month
This is any prepayment of your future hazard insurance expense
1002 - Mortgage Ins. Premium Reserves months @ $ per month
This is any prepayment of your future mortgage insurance expense
1003 - School Tax months @ $ per month
This is any prepayment of your future school tax expense
1004 - Taxes and Assessment Reserves months @ $ per month
This is any prepayment of your future tax expenses, such as property taxes

1005 - Flood Insurance Reserves months @ $ per month months
This is any prepayment of your future flood insurance expense

TITLE CHARGES:

1101 - Closing or Escrow Fee
This is the cost of escrow. This is the service of a neutral party that actually handles the money between all the different parties in a real estate transaction, including: the lender, the buyer, the seller, the agents, notary, etc. This is often times done by the “Title Company” – a related entity in the same office that provides title insurance
1105 - Document Preparation Fee
This is the charge for preparing the loan documents. Lenders often email the loan documents to the escrow company, which in turn prints them out and reviews them before signing
1106 - Notary Fees
This is the cost of the notary. This is to have all of the legal documents surrounding this transaction notarized
1107 - Attorney Fees
Any legal charges
1108 - Title Insurance
This is the cost of insuring the title of the property. If there is a question about title (who really owned the property), after the transaction is done then this insurance protects the lender from future problems

1200 GOVERNMENT RECORDING & TRANSFER CHARGES

1201 - Recording Fees
This is the cost of updating relevant government records
1202 - City/County Tax/Stamps
Unavoidable government charge
1203 - State Tax/Stamps
Unavoidable government charge

1300 ADDITIONAL SETTLEMENT CHARGES:

1302 - Pest Inspection
This is the cost of the pest inspector. Their purpose is to document the state of the property that the lender is making the loan on
Others charges
These can be additional charges that change within different loan sources
Pay particular attention to these charges, but they can also be listed in other sections

Saving on your expenses

The expenses are in three different categories:

Fixed – government charges
Slightly variable but small – escrow, notary, pest inspector, appraiser
Highly variable – loan fees

The biggest expenses are usually in the loan fee section. This is where you need to focus to try to get a good deal.

Compare the GFE’s you receive from different lenders. Keep in mind that these GFE’s are only estimates. They can change, and sometimes become unpleasant last minute surprises.

The author is the owner of Archer Pacific, a mortgage company. The firm’s website, archerpacific.com/ archerpacific.com, has extensive resources and tips on many mortgage topics.

Have you been California dreaming? Maybe you see yourself up on the big screen, and your footprints set along the Hollywood Walk of Fame. Perhaps you picture yourself catching waves or a tan at a fabulous Malibu beach. California seems to have it all: year-long mild temperatures, palm trees, and a laidback lifestyle. With the help of California home mortgage lenders, though, you won’t have to settle for California dreamin’ for long. You, too, can live that California dream in your own home!

Bad News before the Good
In recent years, the Golden State’s cost of living has steadily increased, with San Diego and Los Angeles becoming some of the most expensive U.S. cities to reside in. So many Californians have packed up and relocated to other states. Not all of the news is bad, however. California has the largest Gross State Product, or GSP, in the entire United States. Also, the Golden State has several regions, including Silicon Valley, Napa Valley, and Hollywood, which are vital to the nation’s economy. Moreover, the state’s average personal income ranks in the top quarter of the country. In fact, the housing industry is alive and kicking in California. In 2005, it accounted for nearly $70 billion and 490,000 jobs state-wide.

Cooling Off, California-Style
Experts believe the housing market around the country has started to cool. That trend can be observed in Southern California, where more homeowners are pursuing “mortgage debt forgiveness.” This happens when home prices drop and the property’s value is less than the mortgage debt. These “short sales” are used to avoid home mortgage foreclosure. Foreclosure occurs when California home mortgage lenders must sell your home due to your failure to comply with the mortgage agreement. Note, however, that the growing use of “short sales” should not scare you from contacting California home mortgage lenders about a loan. A “short sale” can put you in charge if you ever need to cut your losses.

Numbers, Numbers, Numbers
Before doing business with California home mortgage lenders, you should first look up the rates and Annual Percentage Rates, or APRs, of various California mortgages. Put yourself in the driver’s seat by filling out a short form to get the mortgage rates of several California home mortgage lenders. Some popular types of mortgages in California include the 30-year fixed, 5-year interest-only mortgage and the interest-only, 30-year fixed mortgage.

Let the Directory Direct You
Use a mortgage directory to get the mortgage rates of hundreds of companies. After finding the company with the perfect fit for your mortgage needs, give the company a ring. A ring will put you well on the way to making your dream a reality.

When Enough Is Enough
An issue that you must determine after contacting a California home mortgage lender is how large of a mortgage you should take out. Although California’s housing market is cooling, it is not completely ice-cold. Banks consider how much of a mortgage is within your budget, so you should think about this before borrowing as much as you want. Several online companies provide a mortgage calculator, so you don’t have to pluck figures out of thin air. Based on how large your loan is and its interest rate, the calculator determines the monthly payment you’ll have to make to a California home mortgage lender.

Truly, with California home mortgage lenders at your beck and call, there’s no reason for you not to be living the California dream. With the right loan, you can live large and live in leisure in California.

Looking for whataboutloans.com/mortgage/mortgage-lender.html California home mortgage lenders? Visit our site today for resources about whataboutloans.com mortgage quote or a whataboutloans.com/mortgage/mortgage-quoter.html mortgage quoter.

According to the NAMB (National Association of Mortgage Brokers), two out of three Americans work with a mortgage broker to purchase a home because of the broker’s expertise and wide selection of loan products and lenders. However, with so many so called “experts” out there, how does one separate the wheat from the chaff? How do you know if a broker is honest? And how do you know they’re an “expert” or not?

The NAMB says that over 70 percent of brokers are legitimate, that is they have safeguards and policies in place to make sure that they stay on the straight and narrow. So what about the other 30 percent? Well, the whole 30 percent isn’t bad, but just as in any classroom, you’re going to have those at the top, some in the middle, a few at the bottom, and others who simply don’t show for class. Obviously, those at the bottom and the no shows would not be your first choice if you were going into surgery and they were holding the scapel, nor should they be handling your loan when you purchase a home or refinance.

Because of the surge in numbers of mortgage brokers in the past few years, there are plenty of incompetent and dishonest brokers out there. In order to avoid the 30 percentile, I offer the following tips to help you find a mortgage broker that is not only an expert but honest and reputable as well:

Don’t believe everything you hear. Asking friends or family to recommend a mortgage professional is usually the first place people start. However, how do they know the broker is reputable and trustworthy? Check with your state regulatory offices and licensing bureau once you have some referrals. Better to be safe than sorry.

Use an NAMB certified mortgage broker. Brokers certified by the NAMB practice the highest ethical and professional standards in the industry. There is a “Find a Broker” link on the NAMB’s website at www.namb.org.

Use an Upfront Mortgage Broker (UMB). These brokers disclose their fees to customers in writing in advance at the customer’s request. They also disclose the wholesale prices they receive from lenders. For a list of UMBs visit www.mtgprofessor.com.

Honesty is the best policy. If a mortgage broker suggests that you lie on your loan application in any way, he/she is most likely in the 30 percentile. Walk away.

They need to show you the money. If a mortgage broker doesn’t disclose your closing costs in three business days, it’s probably best to take your business elsewhere.

If you’re not bleeding, they shouldn’t be applying pressure. A mortgage broker who pressures you into anything you are not comfortable with probably failed ethics. No reputable broker will pressure you into anything you don’t feel comfortable with.

There are no stupid questions. Does the mortgage broker answer all your questions to your satisfaction? Are his/her answers straightforward, honest, and respectful?

Do you have a reservation? If you feel comfortable with whom you’re working with and feel like they have answered all your questions and put all your reservations to ease, you’ve probably found a good mortgage broker.

Brian Daniel is a loan officer for Bend Mortgage Group Ltd. a mortgage company in Bend, Oregon. He is also the company’s marketing coordinator. For more information or help with an bendmortgagegroup.com Oregon home loan visit bendmortgagegroup.com bendmortgagegroup.com.

Why does the game Monopoly still get people excited? Sure it is fun to compete against each other but the bottom line is that in order to win you will have to dominate the other person’s real estate. And the symbol of that is all the cute little houses and hotels. Yes its all about a nice piece of real estate!

Right now many people have invested their IRA and 401Ks and so on a “diversified stock portfolio” that will most likely and “hopefully” include a balanced mix of large cap stock, small cap stock, blue chip, real estate REITs, international and other assets.

However you cannot win at monopoly with some “real estate stock”, you have to own the whole thing outright! of course this is a joke analogy but the point I am trying to make is that real estate owned in stock is different that owning the property itself as a whole outright!

When I was checking some of INGs mutual funds the other day I noticed that the real estate stocks are at much higher risk grade compared to the other assets, the only higher one than that was the international funds! This of course does not come of any surprise, right now the market is experiencing a recession in many areas (not all areas of course) and the prices are still in a decline and the mortgage market risk exposure it growing.

But this maybe makes a “real estate stock” and a “mortgage backed security” a “bad investment” not real estate itself a bad investment! There is a big difference here.

In a down market you can buy cheap real estate and in an up market you can sell it! this is always the fundamental formula of the real estate market it self. With the right backup and know how you can make money in “any” market “anytime” and this does not just belong to those late night infomercials! real estate is a “fundamental” asset not a piece of paper! even if you find oil or a gold mine you are still owning a piece of real estate that that particular asset happens to be there also!

What I am trying to reach here is that you do not need the “Wall Street” to make money in real estate! you just need a spot on the boardwalk!

Parsa Sepahi is the Co-Founder of

What are the advantages of investing in condo rentals versus houses? Simplified maintenance, and more cash flow in some areas. The catch? Some condominium complexes won’t allow you to rent out units. The solution? Find one that allows it.

In many areas, the rental rates for condos and houses of similar size are about the same. Sometimes a two bedroom house will get just a little bit more than a condo. On the other hand, in a condo complex with a swimming pool, the rent might be the same or even higher.

The more important point is that while rentals rates are similar, purchase prices are often very different. When we lived in Tucson, Arizona, for example (2005), you could buy some decent two-bedroom condo units for as little as $74,000. To get below $160,000 for a two bedroom house you had to start looking at fixer-uppers, or in the bad parts of town.

The houses cost more than twice as much, but what did they rent for? The rent was a little more for a house. A little more rent, and you pay more than twice as much? There was no possibility of cash flow with rental houses in Tucson in 2005. It was at least possible to break even on a condo rental.

Each area is different in the relationship between the prices of condos versus houses. In some places the condos cost as much or more than the houses. But in most places, unless they are on a golf course or lakefront, they are less than houses of the same size.

Checking just now (January 2007) for example, I see that there are several 2 bedroom condos for sale in Austin Texas, for under $50,000. I’m not sure what the rental rates are there, but you don’t need much rent to get positive cash flow at that price. And there no two bedroom houses listed for sale that cheap at the moment.

If you invest in condos as rentals, be sure that the complex you buy in allows you to rent out the units. Some only allow owner-occupied units. Others may limit the number of units that can be used as rentals. This is because banks will stop loaning on condos if more than a certain percentage in a complex are rentals. This can make it hard to sell, so be happy that they enforce these rules.

Also remember to take into account the condo association dues (sometimes called HOA fees, or home owners association dues) when accounting for your expenses. Relative to the purchase price and rent, your expenses may seem a little high compared with houses. On the other hand, since all exterior maintenance is usually included in the monthly fee, there are fewer unpleasant surprises with condos than with houses.

Follow the usual procedure in analyzing a potential condo rental purchase. Start with projected income, subtract all expenses, to arrive at the net income before debt service. When you can borrow what you need for payments less than this amount (leaving you some cash flow), condo rentals can be a great investment.

One other thing. Such a discrepancy between condo prices and the prices of houses doesn’t necessarily continue. If interest rates rise, or housing prices rise too fast, more and more people will start to notice that condos are cheap by comparison. The demand thus created may cause condo prices to rise even as the prices of homes stop rising.

Copyright Steve Gillman. This article was an excerpt from 99reports.com/make-money-in-real-estate.html 69 Ways To Make Money In Real Estate. Want to know the other 68 ways? Visit 99reports.com/make-money-in-real-estate.html 99reports.com/make-money-in-real-estate.html

Arizona, nicknamed as The Grand Canyon State, is located in the southwestern United States. It is best known for its desert landscape, scenic mountain ranges, sparkling waters and warm climate. Home to several race courses, holiday resorts and lush green golf courses, the state of Arizona boasts of a flourishing real estate market. Arizona real estate prices have gone through a continued rise over the past seven years. Therefore, the state attracts a plethora of real estate investors who wish to make a fortune through Arizona real estate investments.

There is an increasing demand for Arizona real estate, which in turn has led to its appreciation over time. Be it single-family homes, condominiums or business properties, prices have gone up for all kinds of real estate, and this upward trend seems quite sustained. A few major reasons behind this bullish trend are as follows:-

Arizona offers a multitude of recreational and sporting activities, such as hiking, fishing, golfing and horse riding. Affordable cost of living, calm and serene environment, relatively low taxes, and pleasant weather conditions have led to several retirees flocking to Arizona. In addition, several major businesses have relocated in Arizona.

Scottsdale, a city in Arizona, is one of the most sought after locations in United States. Scottsdale has a host of art galleries, museums, parks, grand prix tracks, open air theatres, polo fields and golf courses. Such factors make Arizona real estate a perfect investment avenue for real estate investors.

Though some properties in Scottsdale are rather high priced, most of Arizona real estate assets can be secured at reasonable costs. For instance, an average home in Phoenix would cost you around $300000. And considering the fact that home values have appreciated by 25% over the past 12 months, such an investment could well be regarded as a fruitful one.

All in all, Arizona real estate holds scads of opportunities for investors. It has managed to sustain an upward trend for the past several years, which is expected to continue well into the year 2007. With its preferable climatic conditions and booming economy, Arizona real estate is the perfect place to invest in 2007.

Copyright © 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author’s information with live links only.)

Joel Teo writes on various financial topics including Investment Properties in Las Vegas. Learn more about Investment Properties in Las Vegas in our Real Estate Investment Resource Site today.

If you are struggling with bad credit trying to get your mortgage application approved but have been denied there are steps you can take to have your application approved. Having bad credit means you will have more legwork to get your mortgage application approved, especially to find a good interest rate. Here are tips to help you get approved and save money while avoiding common mortgage mistakes.

Mortgage brokers are an excellent means to find loan offers from mortgage lenders that specialize in bad credit lending. Shopping from more than one broker will give you exposure to the maximum number of loan offers. Mortgage brokers will often tell you that you cannot qualify if they cannot match you with a lender in their portfolio; however, this is simply not true. Just like mortgage lenders, some mortgage brokers are better than others. Shopping from a wide variety of mortgages brokers will help you find the financing you need.

The most important thing to remember when you have poor credit is to be persistent. Use the Internet to submit your application to multiple mortgage lenders; if you put in the time you can receive as many as four offers from each application you submit. Online brokers and mortgage sites pass your application to hundreds of lenders that specialize in mortgage refinancing, bad credit mortgages, and jumbo mortgage loans.

The advantage of using the Internet is that many of these sites will not run your credit; they will simply ask for information regarding your income and the state of your credit. Do not embellish the information as exaggerating your income or credit rating will not help you get approved. Before you start submitting applications it is important to check your credit reports for errors. Your credit records are maintained by three credit agencies and are prone to errors.

You can boost your credit score by paying down the balances on your credit cards and by making sure your payments are made on time. You can learn more about your mortgage options, including ways to improve your credit by registering for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid common mortgage mistakes and predatory lenders. For a free copy of “