Dictionary of Real Estate Terms: good faith estimate
good faith estimate
under the Real Estate Settlement Procedures Act, an estimate of closing costs that must be given by a lender to mortgage applicants (for residential loans on one to four units) within three days after loan application is made. Since actual costs are not known at that time, these estimates are based on good faith, or the lender's best estimate.
Example: Gwen applied for a mortgage loan on a duplex. Within three days the mortgage banker sent a good faith estimate of closing costs including points, origination fees, title, and legal expenses.
