When you hear the term “closing costs”, it generally refers to a group of fees that must be paid during the settlement process. FHA Mortgage Closing Costs can include such things as lender origination fees, attorney fees, appraisal and inspection fees and more. The FHA has a list of allowed fees that can be charged to the borower on FHA Mortgages. These fees are referred to as “allowable closing costs”, and can vary from lender to lender. When comparing lenders for an FHA Mortgage, it is important to obtain a Good Faith Estimate so you can compare these FHA Mortgage Fees. FHA Mortgage Fees that are currently allowed include:
Lender Origination Fee - Deposit Verification Fee
- Attorney’s Fee
- Appraisal Fee
- Home Inspection Fee
- Title Insurance
- Title Examination Fee
- Document Preparation Fee
- Property Survey Fee
- Credit Report Fee
- Transfer Stamps
- Recording Fee
- Taxes
Even if you are not a U.S. citizen, you must have a valid Social Security Number (SSN). An individual Tax Identification Number (ITIN) is not an acceptable substitute.
Is Mortgage Insurace Required for an FHA Mortgage?
Yes – as you will with most all of them. There is an up front mortgage insurance premium equal to 1.75% of the loan amount that is paid at settlement (1.5% for an FHA Streamline Refinance). This 1.75% fee can be financed into the total loan amount. In most cases, this mortgage insurance premium is included in your loan amount, so you are really paying it over the life of the loan. In addition, on loans with a term of greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home), you will pay an annual mortgage insurance premium of of the loan amount in monthly installments.
