Comparison shopping when refinancing your mortgage can save you thousands of dollars in finance charges. When you compare mortgage loans it is important to compare all aspects of the offers, not just the mortgage interest rate. The Good Faith Estimate makes it easy to compare mortgage loan offers line for line. Here are tips to help make sense of Good Faith Estimates to ensure you choose the best mortgage loan available.

Mortgage lenders are required to provide Good Faith Estimates upon receiving your application; however, most will give you this document if you simply ask for one. Asking for the Good Faith Estimate before applying for the mortgage enables you to make an informed decision as to which loan is best.

There are a number of items listed on the Good Faith Estimate you need to focus on for the purposes of comparison shopping. These items include the origination fee and who it is paid to, and the processing fee and who it is paid to. The loan origination fee should not be higher than 1-.5% for a home you will occupy, and 2-2.5% for an investment property; if the fees are higher the lender is overcharging you. The loan processing fee should not be higher than $400, period. Any more and the lender is marking up fees unnecessarily.

Look for anything on the Good Faith Estimate that resembles a “broker administration fee,” “broker courier fee,” “application fee,” or “lock fee.” These are junk fees that you should simply refuse to pay. If the lender or broker insists on charging these fees, find another mortgage company. Mortgage lenders and brokers often invent clever names to disguise these fees in their loan documents; if you are unsure of any fee, question the lender or broker about that fee. To learn more about reading the Good Faith Estimate when shopping for the best mortgage loan register for a free mortgage guidebook