Closing Costs
The cost of FHA loans is regulated by the HUD (Housing and Urban Development Department), which keeps costs at a minimum for you. There are always fees involved with the closing process. However, some of these fees are paid by the buyer, and some are paid by the seller.
Loan Fees
- The Good Faith Estimate explains exactly what fees are covered by the lender. In it, you will also find a description of the standard one-time closing costs for a FHA loan. These fees are generally paid by the buyer or the seller. If you wish, there is room to negotiate what percentage of these fees is going to be paid by the home seller or buyer.
Here are some of the fees which the Good Faith Estimate outlines. Keep in mind that these fees can be negotiated:
| Items Payable In Connection with Loan | |
| 801 Loan Origination Fee % | Explanation of Fee |
| 802 Loan Discount % | Explanation of Fee |
| 803 Appraisal Fee | Explanation of Fee |
| 804 Credit Report | Explanation of Fee |
| 805 Lender's Inspection Fee | Explanation of Fee |
| 806 Mortgage Insurance Application Fee | Explanation of Fee |
| 807 Assumption Fee | Explanation of Fee |
| 808-809 Mortgage Broker Fee | Explanation of Fee |
| 810 Loan Processing Fee | Explanation of Fee |
| 811 Underwriting Fee | Explanation of Fee |
| 812 Wire Fee | Explanation of Fee |
| 813 Flood Certification | Explanation of Fee |
Prepaid Items
There are also reoccurring prepaid fees which must be paid. You may be required to prepay certain items at the time of settlement/closing. Some of these items are listed below, for your convenience:
| Items Required by Lender to be Paid in Advance | |
| 901. Interest from to @ $___ per ____day | Explanation of Fee |
| 902. Mortgage Insurance Premium for months | Explanation of Fee |
| 903. Hazard Insurance Premium for years | Explanation of Fee |
| 904. years to | Explanation of Fee |
Escrow Impound Account Reserves
An escrow impound account must be set up for every single FHA loan which is requested. This will allow your hazard insurance and property taxes to be combined with your monthly payment and paid annually.
| Reseves Deposited with Lender | |
| 1001. Hazard Insurance months @ $____ per ____ month | Explanation of Fee |
| 1002. Mortgage insurance months @ $____ per ____ month | Explanation of Fee |
| 1003. City property taxes months @ $____ per ____ month | Explanation of Fee |
| 1004. County property taxes months @ $____ per ____ month | Explanation of Fee |
| 1005. Annual assessments months @ $____ per ____ month | Explanation of Fee |
| 1006. months @ $____ per ____ month | Explanation of Fee |
| 1007. months @ $____ per ____ month | Explanation of Fee |
| 1008. Aggregate Adjustment | Explanation of Fee |
Title and Miscellaneous Fees
These fees include everything else involved with the processing and handling of your FHA loan. Your lender must provide a quote of these estimated fees for you. This includes title charges, which may cover a variety of services performed by title companies and others. Whether or not your individual settlement includes the items below or not may vary.
| Title Charges | |
| 1101. Settlement or closing fee to | Explanation of Fee |
| 1102. Abstract or title search to | Explanation of Fee |
| 1103. Title examination to | Explanation of Fee |
| 1104. Title insurance binder to | Explanation of Fee |
| 1105. Document preparation to | Explanation of Fee |
| 1106. Notary fees to | Explanation of Fee |
| 1107. Attorney's fees to | Explanation of Fee |
| 1108. Title Insurance to | Explanation of Fee |
| 1109. Lender's coverage $ | Explanation of Fee |
| 1110. Owner's coverage $ | Explanation of Fee |
Recording and Transfer Fees
Recording and transfer fees include the fees from the city, county, and state. Who pays these can be negotiated by the buyer and seller. In general, the buyer pays the fees for legally recording the new deed and mortgage (line 1201). Transfer taxes 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 (line 1202 and 1203).
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Government Recording and Transfer Charges 1201. Recording fees: Deed $ ; Mortgage $ ; Releases $ 1202. City/county tax/stamps: Deed $ ; Mortgage $ 1203. State tax/stamps: Deed $ ; Mortgage $
Additional Settlement Charges
If you come across additional settlement charges, they may be other third party fees for services rendered in order to satisfy all loan buyer and seller requirements. A termite report is required for all FHA loans.
| Additional Settlement Charges | |
| 1301. Survey to | Explanation of Fee |
| 1302. Pest inspection to | Explanation of Fee |
| 1303. - 1305 Lead-Based Paint Inspections | Explanation of Fee |
If you are purchasing a home, the total of all of these fees can be added to your down payment, which will total the amount needed to close your transaction.
If you are refinancing a home, these fees could be added to your new loan amount, paid out of pocket, or financed into the interest rate with a lender credit.
