A loan fee worksheet is sometimes referred to as a cost estimate worksheet.
In 2010, the United States Department of Housing and Urban Development or HUD created the Good Faith Estimate or GFE. In 2015, the Loan Estimate form replaced the Good Faith Estimate. These forms are both legally binding commitments that lenders issue within three days of a loan application.
To receive a Loan Estimate, you must submit financial documents and approve the lender to pull your credit report. Then, you need to submit an application with the property’s address. On the other hand, a loan fee worksheet is a document with estimated loan costs for a mortgage scenario. As a result, these worksheets do not fall under all the consumer protections of a Loan Estimate.
Additionally, because these are merely mortgage scenarios, the numbers on these documents are not guaranteed. Instead, the loan fee worksheet is intended for informational purposes only. It can also be used for the pre-qualification or pre-approval of a mortgage.
The fees worksheet is designed to help give you an idea of the amount of cash that you may need to close and a proposed monthly mortgage payment. It will likely contain the total loan amount, the interest rate, and the loan term on the top of the form.
The top section contains the lender’s origination fees and other charges, such as an appraisal fee and credit report fee.
At the bottom left, the worksheet has the total estimated funds that the borrower will need to close. In addition, the bottom right contains the total estimated monthly payment.
It is essential to keep in mind that the loan fee worksheet is before the Loan Estimate form. Your Loan Estimate is an approximation of your loan terms based on your financial information. Additionally, the Closing Disclosure contains the finalized cost amounts.
Many homebuyers have found that their Loan Estimates were slightly different from their Closing Disclosure. Now considering your loan fee worksheet is estimated without your financial information, such as your credit score and income verification, it is likely that there will also be some differences.
For preliminary house shopping, a loan fee worksheet may be sufficient. This situation may be the case for you before you have a property address to formally submit for a Loan Estimate. However, when you have found a home that you are interested in, it is recommended to apply for a custom mortgage quote and receive Loan Estimate forms from a few different lenders.
Having several different Loan Estimates will give you a better picture of all the costs associated with a mortgage, such as closing costs. Moreover, you will also get a more accurate quote in your Loan Estimate that is closer to your final loan terms in your Closing Disclosure.