Question

When are the Good Faith Estimate and HUD-1 Closing Statement required?

A) The Good Faith Estimate (GFE) is required at the beginning of the mortgage application process, while the HUD-1 Closing Statement is provided at the closing of the loan.
B) The Good Faith Estimate (GFE) is provided at the closing of the loan, while the HUD-1 Closing Statement is given at the beginning of the mortgage application process.
C) Both the Good Faith Estimate (GFE) and HUD-1 Closing Statement are provided at the beginning of the mortgage application process.
D) Both the Good Faith Estimate (GFE) and HUD-1 Closing Statement are given at the closing of the loan.

Answer 1

The Good Faith Estimate (GFE) is required at the beginning of the mortgage application process, while the HUD-1 Closing Statement is provided at the closing of the loan.

Step-by-step explanation:

The correct answer is A) The Good Faith Estimate (GFE) is required at the beginning of the mortgage application process, while the HUD-1 Closing Statement is provided at the closing of the loan.

A Good Faith Estimate (GFE) is an itemized list of estimated closing costs provided by a mortgage lender to a borrower within 3 business days of their loan application. It gives the borrower an idea of what to expect in terms of fees and charges associated with the loan.

On the other hand, a HUD-1 Closing Statement is a document provided to the borrower at the closing of the loan. It details all the actual costs and charges associated with the loan, including the final loan amount, interest rate, and closing costs.