Good Faith Estimate Definition

In the general sense, a good faith estimate is nothing more than an estimate of cost or effort provided by an individual who believes the estimate to be valid. For example, the air conditioner repair representative might state "In my opinion, it will cost $250 to repair this unit"; of course, the repair service would not be contractually obligated to perform the work for the estimated amount. In mortgage lending, the phrase "good faith estimate" has a more defined meaning-by US law a mortgage lender must provide a good faith estimate that itemizes the fees and costs associated with a mortgage loan application. Thus, when applying for a mortgage loan you should expect to see a good faith estimate within three days, itemizing all of the costs associated with the mortgage loan if it actually is offered. Mortgage loan good faith estimates use a standard form so that consumers can compare costs associated with different lenders. Note that the good faith estimate is only an estimate-closing costs may vary considerably.