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Many first time home buyers focus on the interest rate and the APR when shopping for a loan. While this is indeed very important aspects of the loan, they may not even the most important thing for a first time home buyer. Comparing the good faith valuation by the lender for the first time home buyer to determine whether they really so good that you are a business, or if they try to take you to the cleaners. This article is about how a first time home buyer can use the good faith estimate to compare the cost of the lender, but remember, there's a huge difference between the best and always always have the best credit.

Within three days after applying for a loan, by law the lender must give you in person or by mail a completed Good Faith Estimate. This is a form that an estimate of fees and costs of the necessary elements for a successful and close mortgage loans. These items are origination fees, discount and other fees. The good faith estimate is usually a legal form, the size is available in six different categories. These categories are numbered 800, 900, 1000, 1100, 1200, and 1300th It is accompanied by a statement of truth in lending to you the annual percentage rate for the loan as well.

You should see some attention to the APR, but keep in mind that it is a number that is easy to manipulate and some very bad assumptions. Zero APR assumes that the inflation and the value or purchasing power of one U.S. Dollar today will be exactly equal to the value of one U.S. Dollar even 30 years. More significantly, the calculation of the APR assumes that the mortgage will never be paid off early. This is completely unrealistic. Very few first time home buyers (or other borrowers for that matter) for more than 5 years without refinancing or sale. So APR is a very poor method of comparing loans. Comparing Good Faith Estimates are focused on the section, which is directly to the lender.

§ § 900 to 1300 of the good faith estimate are those where a third party fees and charges. The lender has minimal control over them. § § 900 and 1000 are elements that the lender to pay in advance or at the lender. This area is where your accounts to pay the taxes, insurance and mortgage insurance risk and pay you even if your pre-paid interest on the mortgage. Although he says "that the lender, these are specially designed for the loan and not the lender. At the closing, they will be the same with every lender.

§ 1100 is where the loads from the closing attorney or title company. These are the closing agent and not the lender. Most of the time, these closing attorneys or title companies have been by your estate agent. You will note that these fees vary between lenders. This is because the lender is the one that prepares the good faith estimate for you. The lender will estimate these costs to what these items usually cost. The lender has no control over the elements in these sections, so you need this when comparing lenders. But not to take note, if you Loan Officer has significantly lower fees in these sections than others. Some lenders try to stunt in May by using low figures for the third party fees, so that their lenders higher fees on their good faith estimate even. Then, when you have to pay extra money to close, they say their figures are only an estimate, and your agent to an expensive lawyer.

Section 1200, all government taxes and recording fees. Again, this must be the same, regardless of the lender, there is no reason for them as comparison. However, if a specific Loan Officer is clear to this article, you can use to find out how to know they really are.

We skipped section 800 up to now, because this is the one that also points to really compare. These are the fees and charges, which are delivered directly to your lender. This is where for the first time home buyer should really focus and review items to make comparisons. In this section may impose administrative charges, fees, document preparation fees, finance fees, mortgage broker fees, processing fees, underwriting costs fees, transfer fees and other charges which a lender could charge. This can be confusing for a first time home buyer. The key thing you need to do here is simply asking why there is any fee and a plausible explanation. A competent loan officer in a position to explain this to first time home buyer, and why everyone is.

Remember, it is important that you are on the whole package and not just on the interest rate. Unfortunately, first time home buyer loans can be complicated and multiple moving parts. This can be changed in order to look attractive, if necessary. A lender can make an attractive part of the loan if they feel that is what is really important for you. For example, a lender may loan $ 300,000-half a point lower, but the $ 3,000 in extra fees added in the good faith estimate. Because of the ridiculous assumptions are legally required for the calculation of the APR, the loan may also be a lower APR than a loan with lower fees and higher interest rates! As a first time home buyer, be sure to take some time talking about the good faith estimate with your Loan Officer. Ask questions. Compare the whole package together, to see which is truly the best offer. In this conversation, take the time to create a sense of whether your loan officer has your best interests at heart. A good loan officer who understands the needs of a first time home buyer will take the time to view the numbers on good faith that the estimate and adjust it in the whole context of life.

Free mortgage reports and recommendations, including more information on the comparison of costs are available at http://24hourmortgageinfo.com and http://fhaloanadvice.com

Carl Pruitt is a 22 years veteran of the Mortgage / Real Estate industry. It helps first time home buyers with credit problems in a house with no money and low prices.