What constitutes a 10% good faith tolerance level?

A 10% good faith tolerance level refers to the ability of lenders to deviate from the estimates they provide to borrowers in the Loan Estimate, specifically regarding certain closing costs. This means that the actual costs can vary from the initial estimates, but the total amount of these changes must not exceed 10% of the total estimated charges.

Fees that fall under this tolerance level often include recording fees and certain fees from third-party service providers that allow borrowers to choose their service providers. These costs can change slightly between the loan estimate and closing, yet as long as they stay within the 10% threshold of the total fees, the lender is operating within acceptable limits.

Other options, such as interest payments on the loan, appraisal costs, and title insurance may be subject to different rules regarding tolerances and are generally not part of the calculation for the 10% good faith tolerance. Therefore, option B correctly represents the fees that are included under this good faith estimate tolerance guideline, making it the appropriate choice.