Following is a description of the normal
non-reoccurring closing costs for a FHA loan. These fee's
are typically paid by the buyer or owner. It may be negotiated
that all or part of these fee's may be paid by the home seller
or lender.
801.
Loan Origination: This fee is usually known
as a loan origination fee but sometimes is called a "point" or "points." It
covers the lender's administrative costs in processing
the loan. FHA regulates this fee to a maximum of 1% of
the loan amount. Often this is expressed as a percentage
of the loan. Generally, the buyer pays the fee, unless
otherwise negotiated. Back
802.
Loan Discount: Also often called "points" or "discount
points," a loan discount is a one-time charge imposed
by the lender or broker to either lower the rate at which
the lender or broker would otherwise offer the loan to
you or may be used to lock-in the interest rate for an
extended period. This fee may vary. Back
803.
Appraisal Fee: This charge pays for an appraisal
report made by an independent FHA appraiser. Typically
range from $300 - $500. Back
804.
Credit Report Fee: This fee covers the cost
of a credit report, which shows your credit history.
The lender uses the information in a credit report to
help decide whether or not to approve your loan and how
much money to lend you. Typically $40 - $55. Back
805.
Lender's Inspection Fee: This charge covers
inspections, often of newly constructed housing, made
by employees of your lender or by an outside inspector.
(Pest or other inspections made by companies other than
the lender are discussed in line 1302.)
806.
Mortgage Insurance Application Fee: This
fee covers the processing of an application for mortgage
insurance. Back
807.
Assumption Fee: This is a fee which is charged
when a buyer "assumes" or takes over the duty
to pay the seller’s existing mortgage loan.
808.
- 809. Mortgage Broker Fee: Fees paid to
mortgage brokers would be listed here. A CLO fee would
also be listed here.Back
810.
Loan Processing Fee:This fee is for the
administrative cost of processing your loan files required
paperwork. This fee is a "buyers non-allowable fee" which
means the seller or lender must pay this fee.
811.
Underwriting Fee: Fee charged by investor
for underwriting the submitted loan file and all of its
paperwork. This fee is also a "buyers non-allowable
fee". Back
812.
Wire Fee: Fee charged by investor for wiring
out the required funds to close the loan. This fee is
a "buyers non-allowable fee".
813.
Flood Certification: Every FHA loan request
a flood report to insure that it is not located in a
flood zone. If property is in flood zone, owner required
to obtain flood insurance. This fee is a "buyers
non-allowable fee". Back
Prepaid Items
The following fee's are reoccurring pre-paid
fee's. You may be required to prepay certain items at the
time of settlement / closing. Some of these items would be
accrued interest, mortgage insurance premiums, and homeowners
/ hazard insurance.
 900. ITEMS
REQUIRED BY LENDER TO BE PAID IN ADVANCE |
| 901.
Interest from to @ $___ per ____day |
Explanation |
| 902. Mortgage
Insurance Premium for months to |
Explanation |
| 903. Hazard
Insurance Premium for years to |
Explanation |
| 904. years
to |
Explanation |
| 905. |
|
901.
Interest: Lenders require borrowers to pay
the interest that accrues from the date of settlement
/ closing to the first monthly payment which is prorated
daily based on the new loans interest rate. Back
902.
Mortgage Insurance Premium: FHA Mortgage
Insurance Premium fee is 1.5% of the loan amount. This
fee may be financed into the loan amount. If you pay
the FHA loan off within the first seven years, you may
be entitled to a prorated refund of the MIP.
903.
Hazard Insurance Premium: Hazard insurance
protects you and the lender against loss due to fire,
windstorm, and natural hazards. Lenders often require
the borrower to bring to the settlement a paid-up first
year’s policy or to pay for the first year's premium
at settlement. Back
904.
Flood Insurance: If the lender requires
flood insurance, it is usually listed here.
Escrow Impound
Account Reserves
All FHA loans require the establishing
of an escrow impound account. This account allows your property
taxes and homeowners / hazard insurance to be included in
your monthly payment and paid annually as needed.
| 1000. RESERVES
DEPOSITED WITH LENDER |
| 1001. Hazard
Insurance months @ $____ per ____ month |
Explanation |
| 1002. Mortgage
insurance months @ $____ per ____ month |
Explanation |
| 1003. City
property taxes months @ $____ per ____ month |
Explanation |
| 1004. County
property taxes months @ $____ per ____ month |
Explanation |
| 1005. Annual
assessments months @ $____ per ____ month |
Explanation |
| 1006. months
@ $____ per ____ month |
Explanation |
| 1007. months
@ $____ per ____ month |
Explanation |
| 1008. Aggregate
Adjustment |
Explanation |
1001.
Hazard Insurance: Usually 2 months prorations
of your annual homeowners / hazard insurance policy. Back
1002.
Mortgage Insurance: Usually 2 months of
the monthly FHA mortgage insurance premium. This monthly
fee is calculated as .5% of the final FHA loan amount
divided by 12 for the monthly prorations.
1003.
City Property Taxes: Some cities have assessed
property taxes which would be collected here. This will
vary from city to city. Back
1004.
County Property Taxes: The
amount of property taxes collected will vary and would
be prorated based on the number of payments made on the
new loan to until your property taxes are due. May be
from zero to eleven months in advance.
1005-1007.
Other Prorations: These would be any other
fee's such as HOA dues.
1008.
Aggregate Adjustment: The lender is not
allowed to collect more than a certain amount. The individual
item deposits may overstate the amount that can be collected.
The aggregate adjustment makes the correction in the
amount on line 1008. It will be zero or a negative amount. Back
Title & Other
Fee's
This fee's are all other fee's associated
with obtaining a FHA loan. Although these are not lender
fee's, lenders must provide a quote of the estimated fee.
These quotes may vary significantly. Title charges may cover
a variety of services performed by title companies and others.
Your particular settlement may not include all of the items
below or may include others not listed.
| 1100. TITLE
CHARGES |
| 1101. Settlement
or closing fee to |
Explanation |
| 1102. Abstract
or title search to |
Explanation |
| 1103. Title
examination to |
Explanation |
| 1104. Title
insurance binder to |
Explanation |
| 1105. Document
preparation to |
Explanation |
| 1106. Notary
fees to |
Explanation |
| 1107.
Attorney’s
fees to |
Explanation |
| (includes
above items numbers; ) |
|
| 1108. Title
Insurance to |
Explanation |
| (includes
above items numbers; ) |
|
| 1109.
Lender’s
coverage $ |
|
| 1110.
Owner’s
coverage $ |
|
| 1111. |
|
| 1112. |
|
| 1113. |
|
1101.
Settlement or Closing Fee: This fee is paid
to the settlement agent or escrow holder. Responsibility
for payment of this fee should be negotiated between
the seller and the buyer. Back
1102-1104. Abstract
of Title Search, Title Examination, Title Insurance Binder:
The charges on these lines cover the costs of the title
search and examination.
1105.
Document Preparation: This is a separate
fee that some lenders or title companies charge to cover
their costs of preparation of final legal papers, such
as a mortgage, deed of trust, note or deed. Back
1106.
Notary Fee: This fee is charged for the
cost of having a person who is licensed as a notary public
swear to the fact that the persons named in the documents
did, in fact, sign them. Usually $40 - $120. Back
1107.
Attorney's Fees: You may be required to
pay for legal services provided to the lender, such as
an examination of the title binder. Occasionally, the
seller will agree in the agreement of sale to pay part
of this fee. The cost of your attorney and/or the seller’s
attorney may also appear here. If an attorney's involvement
is required by the lender, the fee will appear on this
part of the form, or on lines 1111, 1112 or 1113. Back
1108.
Title Insurance: The total cost of owner's
and lender's title insurance is shown here. Back
1109.
Lender's Title Insurance: The cost of the
lender’s policy is shown here.
1110.
Owner's (Buyer’s) Title Insurance: The
cost of the owner's policy is shown here. Back
Recording and
Transfer Fee's
These fees are city, county and state fee's.
They may be paid by you or by the seller, depending upon
your agreement of sale with the seller. The buyer usually
pays the fees for legally recording the new deed and mortgage
(line 1201). Transfer taxes, which in some localities are
collected whenever property changes hands or a mortgage loan
is made, can be quite large and are set by state and/or local
governments. City, county and/or state tax stamps may have
to be purchased as well (lines 1202 and 1203).
| 1200. GOVERNMENT
RECORDING AND TRANSFER CHARGES |
| 1201. Recording
fees: Deed $ ; Mortgage $ ; Releases $ |
|
| 1202. City/county
tax/stamps: Deed $ ; Mortgage $ |
|
| 1203. State
tax/stamps: Deed $ ; Mortgage $ |
|
| 1204. |
|
| 1205. |
|
Additional Settlement
Charges:
These may be other third party
fee's for services rendered in order to satisfy all loan,
buyer, and seller requirements. All FHA loans require a termite
report and clearance. Again, these fee's are negotiable between
buyer and seller.
| 1300. ADDITIONAL
SETTLEMENT CHARGES |
| 1301. Survey
to |
Explanation |
| 1302. Pest
inspection to |
Explanation |
| 1303. |
|
| 1304. |
|
| 1305. |
|
1301.
Survey: The lender may require that a surveyor
conduct a property survey. This is a protection to the
buyer as well. Usually the buyer pays the surveyor's
fee, but sometimes this may be paid by the seller.
1302.
Pest and Other Inspections: This fee is
to cover inspections for termites or other pest infestation
of your home.
1303-1305.
Lead-Based Paint Inspections: This fee is
to cover inspections or evaluations for lead-based paint
hazard risk assessments and may be on any blank line
in the 1300 series.
If your transaction is a purchase, the total
of all of these fee's would then be added to the amount of
your down payment, which would total the amount needed to
close your transaction.
For a refinance, these fee's could be added
to your new loan amount, paid out of pocket, or financed
into the interest rate with a lender credit.
Next, learn how much
of FHA loan you can qualify for.
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