FHA defines allowable closing costs that may be charged for the FHA loan to the borrower. These costs are determined as reasonable and customary by each local FHA office.

FHA Closing Costs

FHA Allowable Costs Charged to the Borrower

The FHA defines allowable closing costs that may be charged to the borrower. These costs are determined as reasonable and customary by each local FHA office.

All other costs in the transaction are considered non-allowable and generally paid by the seller when purchasing a new home or by the lender when refinancing your current FHA mortgage.

The appraisal fee and any inspection fees
Actual cost of credit reports
Lender's origination fee
Deposit verification fees
Home inspection service fees up to $200
Cost of title examination and title insurance
Document preparation (by a third party not controlled by the lender)
Property survey
Attorney's fees
Recording fees, transfer stamps and taxes
Test and certification fees, water tests, etc.

Allowable in a refinance: courier fees, wire transfer fees, fees to payoff bills, reconveyance fees.

FHA LOAN QUESTION # 7 [ -more FHA questions- ]

Q: What are discount points?

A: Discount points allow you to lower your interest rate. They are essentially prepaid interest, With each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point. When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases With each point paid. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.

FHA Loan Rates

Refinance Averages
for 11/20/2009

15 Year Fixed

No Points
Low Interest
Best APR

30 Year Fixed

No Points
Low Interest
Best APR

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