Finance
What is a 'good faith estimate' (GFE), and has it been replaced?
AA GFE is still required on all Delaware real estate transactions
BThe GFE was replaced by the Loan Estimate (LE) under TRID for most residential mortgage loans in 2015✓ Correct
CThe GFE is only used for FHA loans now
DThe GFE was replaced by the Closing Disclosure (CD)
Explanation
The Good Faith Estimate was replaced by the Loan Estimate (LE) under the TRID rule effective October 3, 2015. The LE must be provided to borrowers within 3 business days of a completed mortgage application.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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