Real Estate Finance
What Is a Good Faith Estimate (GFE)?
A Good Faith Estimate (GFE) was a standardized mortgage disclosure listing estimated closing costs, required within three business days of a loan application. In October 2015, the GFE was replaced by the Loan Estimate form under TRID (the TILA-RESPA Integrated Disclosure rule). Both the old and new forms appear on the real estate licensing exam.
Old vs. New Disclosure Forms (TRID)
Old: Good Faith Estimate (GFE)
Required within 3 business days of loan application. Listed estimated closing costs. Paired with the early Truth-in-Lending disclosure. Replaced by the Loan Estimate in October 2015.
New: Loan Estimate
Replaced the GFE under TRID. Three-page form due within 3 business days of application. Includes estimated closing costs, loan terms, projected monthly payment, and rate lock information. More consumer-friendly format.
Old: HUD-1 Settlement Statement
Provided to buyers at or before closing. Listed all actual closing costs. Replaced by the Closing Disclosure in 2015.
New: Closing Disclosure
Replaced the HUD-1 under TRID. Must be provided to the buyer at least 3 business days before closing. Allows buyers to compare actual costs to the Loan Estimate and identify any significant changes.
Real Estate Exam Key Points
TRID = TILA-RESPA Integrated Disclosure rule (effective October 2015)
GFE replaced by Loan Estimate — still due within 3 business days of application
HUD-1 replaced by Closing Disclosure — due 3 business days BEFORE closing
TRID is part of RESPA compliance requirements
Both old (GFE, HUD-1) and new (Loan Estimate, Closing Disclosure) may appear on the exam
The Closing Disclosure allows buyers to review and compare final costs before closing
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