Good Faith Estimate (GFE)
The Good Faith Estimate was the pre-2015 document that estimated a borrower's closing costs and loan terms. It was replaced by the Loan Estimate as part of the TRID regulations effective October 2015. You may still hear older borrowers or real estate professionals reference the GFE, but today's equivalent is the Loan Estimate.
Before the Consumer Financial Protection Bureau (CFPB) introduced the TRID rules, borrowers received a Good Faith Estimate within 3 days of application and a HUD-1 Settlement Statement at closing. Critics found these documents confusing and hard to compare across lenders.
The TRID reforms replaced the GFE with the Loan Estimate and the HUD-1 with the Closing Disclosure. The new forms use standardized layouts that make it easy to compare offers from multiple lenders side by side and to check whether actual costs at closing match what was estimated at application.
If you applied for a mortgage before October 3, 2015, you may have closed with a GFE and HUD-1. For all new applications today, the governing documents are the Loan Estimate (issued within 3 business days of application) and the Closing Disclosure (issued at least 3 business days before closing).
Key Takeaway
The Good Faith Estimate was the pre-2015 document that estimated a borrower's closing costs and loan terms. It was replaced by the Loan Estimate as part of the TRID regulations effective October 2015. You may still hear older borrowers or real estate professionals reference the GFE, but today's equivalent is the Loan Estimate.
Related Terms
Frequently Asked Questions
No. The GFE was replaced by the Loan Estimate in October 2015 as part of TRID regulations. Lenders now must issue a Loan Estimate within 3 business days of application.
The Loan Estimate replaced the GFE, and the Closing Disclosure replaced the HUD-1 Settlement Statement.
It provided borrowers with an itemized estimate of their loan terms and closing costs so they could compare offers from multiple lenders.
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