Profile picture for Future28

IS THERE AN FHA FEE?

I was speaking to my lender regarding a good faith estimate for a home I'm considering and he mentioned that the FHA charges a fee of 1.25% of the loan amount which I can either pay at closing or roll into my monthly payments. I just want to make sure that this is accurate/standard and not some way to make extra money.

 

Thank you!!

  • September 12 2008 - US
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Answers (21)

There is a fee for UFMIP, it is mortgage insurance and the amount varies right now based on credit score and loan to value.  To call it an FHA fee is not exactly accurate.

  • September 12 2008
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Up front MIP is standard. It is usually between 1.00%-1.50% of the loan amount based on your credit and loan to value. You can get additional information on it directly on U.S. Department of Housing and Urban Development's website, http://www.hud.gov/offices/hsg/sfh/faqs/atl1cre.cfm#anchor14783 

 

Good luck.

  • September 12 2008
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The UFMIP or Up Front Mortgage Insurance Premium is charged by FHA and can be paid at closing or financed in.

 

SDDL- I have to double check on the dates but I believe that the Risk based pricing change has been suspended.  I read an email earlier this week or last about not being able to use the lower UFMIP cost if the Case number was pulled between certain dates.  Some folks are going to get stuck at higher premiums based on when they applied.  Looks like future is benefiting from the timing.

 

Future-Why are you opting to go with an FHA loan.  The lower UFMIP are for lower risk FHA loans.  Might you qualify for a conforming loan and not need the 1.25% UFMIP?

  • September 12 2008
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So a conforming loan is better then an FHA loan?

  • September 12 2008
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Not necessary, it will depend on several factors - Loan to value - Credit score. The rate may appear better but you need to look at your situation and compare both options. Have you posted a loan request on Zillow? 

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AA - curious what you find out.  I thought FHA risk based UFMIP was until end of month and then will be done effective Oct 1 with the rest of the housing bill.  Just going on memory though.

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Andrew.

 

I recieved a memo from corporate and the FHA risk based pricing is suspended and will not be FICO driven. There is a year moratorium , however I cannot remember the dates. Perhaps Oct 1st.

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I new you wouldn't stay off your game that long Tom!

 

ML 2008-22: Moratorium on Risk-Based Premiums for FHA Mortgage Insurance (09/04/08)

TO: ALL APPROVED MORTGAGEES

The Housing and Economic Recovery Act of 2008 provides for a one-year moratorium on the implementation of FHA’s risk-based premiums beginning October 1, 2008. Consequently, effective with new FHA case number assignments on or after that date, FHA will no longer base its mortgage insurance premiums on a combination of credit bureau score and loan-to-value ratio. The new premiums (upfront and annual) to be implemented for all loans for which a case number is assigned on or after October 1, 2008, are described below. Mortgagee Letter 2008-16 is rescinded in its entirety. Please note that certain parts of that mortgagee letter are retained and reiterated in the guidance that follows.

Upfront Premiums: FHA will charge an upfront premium in an amount equal to the following percentages of the mortgage:


Purchase Money Mortgages and Full-Credit Qualifying Refinances = 1.75 Percent





Streamline Refinances (all types) = 1.50 Percent





FHASecure (Delinquent Mortgagors) = 3.00 Percent.

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Additional info…

Case numbers pulled prior to this that have the higher MIP for the prior risk based premium are not eligible for the lower rate, the case file date drives the MIP.

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Holy Mackerel why do I have to pay more if I want to purchase?  This is an outrage SalemFive, why is your bank doing that?! 

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[content removed by moderator for being inappropriate]

  • September 12 2008
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Andrew. Good info.

 

I didnt know about the diff for purchase vis  a vis  stream and secure. Nor the case number backdate.

 

Its kind of funky isnt it? Risked based now then ......... back to the future .........

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Andrew and Tom,   good to see you two here answering questions that come in.   Wonder where the regulars are??  ;-)  

 

Also, I am supprised with some of the questions that are coming in.   Also supprised with the new people that are coming in to disrupt the answering of questions.  

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Thanks Norman, you seem to always bring professionalism back to these boards.

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LG as far as paying a higher amount for upfront MI with FHA, call your Congressman and FHA as they set the rules the lender must follow for the new MI fee schedule.

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  • Ice L.Zillow
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Please keep all comments and opinions civil and relevant to this topic.

  • September 12 2008
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Should they be informed comments too Ice?  Or should try just try to comment on every question regardless?

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[content removed by moderator for being a personal insult]

 

  • September 12 2008
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Does anyone have an opinion on the probability of the FHA going back to risk-based after the year is up?

  • September 13 2008
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Athughes,    My vote is that they will go back to it.    Maybe even before the year is up.    If you look at the fact that they increased the upfront MIP to 1.75 and the monthly to .55 (.50 with a larger downpayment) they got what they wanted dispite the Moritorium.   

 

The original risked based pricing offerred benefits to alot of people, but it did have higher premiums for the lower credit scores.   It might be interesting to see HUD's Numbers,  I suspect that they will recieve more in premiums with the 1.75% than they would have under the risk based program that they tried to institute.  

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Thanks for the insight Norman

  • September 13 2008
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