What’s a Good Faith Estimate and Is It Still Used? | Rapid Home Loan

If you’ve started shopping for a mortgage or home loan, you might have come across the term Good Faith Estimate (GFE). While once a standard part of the mortgage process, the GFE has evolved over time—and today, it’s no longer the primary disclosure used by lenders.

At Rapid Home Loan, we’re here to break it down for you: what a Good Faith Estimate was, why it mattered, and what has replaced it in today’s lending process.

🧾 What Is a Good Faith Estimate?

A Good Faith Estimate (GFE) was a standardized form that mortgage lenders were required to provide to borrowers within three business days of receiving a loan application. It outlined the estimated costs and terms of a mortgage loan, including:

• Interest rate

• Monthly payments

• Closing costs

• Loan origination fees

• Escrow amounts

• Prepaid taxes and insurance

The idea was to give borrowers a transparent, itemized breakdown of the fees and terms associated with a mortgage so they could compare loan offers from different lenders.

❓ Is the Good Faith Estimate Still Used?

No, the Good Faith Estimate is no longer used for most mortgages.

In October 2015, the Consumer Financial Protection Bureau (CFPB) replaced the GFE and the Truth-in-Lending (TIL) Disclosure with a more streamlined document called the Loan Estimate (LE).

This change was part of the TILA-RESPA Integrated Disclosure (TRID) rule, which aimed to simplify the loan process for consumers and reduce confusion around mortgage costs.

📋 What Replaced the GFE?

🔄 The Loan Estimate (LE)

Today, when you apply for a mortgage through Rapid Home Loan or any other lender, you’ll receive a Loan Estimate instead of a GFE. The Loan Estimate provides the same essential information—but in a clearer, more user-friendly format.

The Loan Estimate includes:

• Loan amount and terms

• Interest rate and whether it’s fixed or adjustable

• Monthly payment estimates

• Estimated taxes and insurance

• Closing costs

• Whether the loan has a balloon payment or prepayment penalty

You’ll receive this within 3 business days of your application, just like the GFE used to be delivered.

🔍 Why Was the GFE Replaced?

The Good Faith Estimate had its advantages, but it also led to confusion and inconsistency, especially when comparing offers from different lenders. The Loan Estimate:

• Uses standardized language and layout across all lenders

• Is easier to read and understand

• Clearly highlights changes in loan terms or costs

• Helps consumers “shop and compare” more effectively

At Rapid Home Loan, we use the Loan Estimate to help our clients understand the full picture of their home financing—no surprises, no hidden fees.

💬 What If You Still See the Term “GFE”?

You might still hear older professionals or online articles refer to the Good Faith Estimate, especially if you’re refinancing an older mortgage or speaking with someone who went through the process before 2015. But rest assured, the Loan Estimate is now the standard across the industry for most residential mortgages.