The Simple Dollar Morning Roundup: Good Faith Estimate Edition

We received our good faith estimate on our home purchase today and my wife and I were quite happy with it. Everything on there was either equal to or less than what our estimates were, and I was concerned that our estimates were on the low side. The house process is sailing right along.

Curb Appeal: One Of My Best Investments Yet Or How I Turned $80 Into $5,000 With Minimal Risk And Effort That’s a very nice idea – I can certainly say that this will add to the curb appeal of the house we just bought in future years. (@ the digerati life)

Understanding The Fine Print Of A Loan Can Save You Money And Grief If you’re going to borrow money from someone (and this includes a credit card) and you don’t read the fine print, as far as I’m concerned, you’re basically asking for something bad to happen. If it’s there in black and white, it’s your responsibility to read it. (@ generation x finance)

Personal Finance Advice Graduates Don’t Want To Hear I agree with almost every point, but I would have completely blown it off five years ago. Stupid me. (@ nytimes via frugal law student)

The Simple Dollar Retro: I Hate Leftovers: Fighting The Battle With Recycled Food And Winning Just yesterday, a reader left a sarcastic comment about how it was a waste of time to eat leftovers because he didn’t feel that leftovers suited his discriminating palate. The real truth is that I didn’t like leftovers either until I figured out how to make them really, really good on the cheap.

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  1. martha in mobile says:

    Re: landscaping — it is certainly true that landscaping adds value, but a nice tree near a fence in a backyard is not going to add $5K just because that is what it would cost to buy it/plant it. A beautifully landscaped yard may add even more than $5K — and it will cost almost that much to install and maintain.

  2. guinness416 says:

    I’m wary of “curb appeal” estimates, they’re all over the map. I will say a house around the corner from me actually lost a few potential buyers because of the large tree outside – between it and the canopy on the porch, the front room was way too dark. I guess may be different for suburbanites where they have a largish garden. We have a mature tree at the back of our garden, but didn’t give it a second thought when we initially saw the place.

  3. Alisha says:

    Watch out for that “Good Faith Estimate.” My husband and I just bought our first house (closed last week), and the actual closing costs were almost double our “GFE,” and 20% more than the MAX we told them we could pay. We found out our actual closing costs at 3:45 on Tuesday, and we were closing at 2 pm the next day. Oh, and that has to be in a cashier’s check.

    In an hour and fifteen minutes, we scrounged around, transfered money from all our hidey-holes, begged from our parents, and got the cashier’s check.

    GFEs don’t have to take into account the settlement agent’s fees, title listing fees, and about a zillion other things I didn’t even recognize. There are also basically no laws governing their accuracy, as far as I can tell.

    We would have argued, fought, insisted that they stay within 30% of their estimate, but they don’t give you any time–that’s why they call the DAY before.

    Oh, and then the 30-year-old refrigerator in the house we bought died the second day we were in the house.

    Emergency fund? What emergency fund?

    So we’re having a very frugal month or so. :)

    Good thing we don’t have any kids and the cat and car are both healthy (fingers crossed).

    Good luck with your house—but consider yourself WARNED. Also, you *cannot* put any of the closing costs on a line of credit of any kind. Just FYI.

  4. kingking says:

    I completely agree with Alisha, watch out for the good faith estimate, it’s usually not worth the paper it’s printed on. My husband and I have purchased 5 homes through the years, and none of the closing cost estimates have been any where close to the actual figure. If you close near the first of the month, the interest you pay is higher (for a complete month versus partial) and usually isn’t reflected in your GFE. Also, you will most likely have to pay an estimated full year’s hazard insurance and property taxes into escrow, in addition to a cushion in case the mortgage company’s estimate is low. My advice is to have an extra three to five thousand available the day prior to closing so you won’t have to scramble transferring money for your cashier’s check. Good luck.

  5. Jennifer says:

    Concerning the good faith estimate, you poor folks got ripped off!!!

    Since people only usually buy a house once or twice in their lives, they (the loan broker, bank, escrow people, appraiser, title company) KNOW how to slam it to people, and they do it at the last minute so people feel they have no choice but to pay.

    If ANYONE reads this post and they are buying or are in escrow, please let me help you knock off those garbage fees, I save people an average of 5000 to 10,000 dollars on escrows.
    Recent example, recently some friends wee buying a house and they wanted to charge them 4500.00 for title fees! I found them a title company that would do it for 360.00 dollars, yes, you read that right, Three hundred and sixty dollars instead of forty five hundred dollars. The loan broker was charging them 7600 for the loan, I got him down to 1900.

    Please let me help you get these unethical outrageous fees down!!!

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