FHA Closing Cost
When purchasing a home, you will
generally have some closing cost in addition
to any down payment. FHA closing costs that
may be charged to the buyer are considered
"allowable" FHA closing cost per HUD. These
are buyer costs that are customary and
necessary to close the mortgage. For all
loans originated after January 27, 2006 the
following table outlines some of the cost.
This is a major change from the
past which limited what fees the borrower
was allowed to pay. This change was
made to bring FHA loans in line with other
traditional loans and make the program more
attractive and usable. FHA will not
allow "mark-ups," i.e., charging a fee to
the mortgagor for an amount greater than
that charged the mortgagee by the service
provider; only the actual cost for the
service maybe charged the mortgagor.
You should consult your lender and
request a copy of the Good Faith Estimate
for charges on your transaction. One
thing to keep in mind is that the seller of
a property may pay up to 6% of the purchase
price for buyer closing costs. This
can help reduce the buyer amount needed to
close.
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