Chicago Swans

FHA Closing costs differ from conventional mortgages by the amount the lender can charge and the amount of insurance coverage homeowners are required to have. FHA mortgages are the last of the government sponsored mortgages. Fannie and Freddie started out as a government charter but privatized over a decade ago. Since FHA is government operated, there are specific safeguards which have been designed to protect borrowers from paying too much closing costs. However, as is the case with most government programs, there?s loopholes. When lenders and brokers close a loan, they all incur cost during the process. These costs are passed along to the borrower in the form of higher rates, or closing costs that are added directly to the closing statement (HUD). In the past, lenders have been known to be very liberal when applying their fees; these extra charges are called ?junk fees.? Be sell my house fast fore you apply, you should insist that the lender disclose their fees on a form called good faith estimate (GFE, you can print a blank form from the link below.) If you look at your GFE you will see a grouping of fees on the left hand side. Each fee is labeled 801, 802, and so on. These are the lenders fees. FHA has strict guidelines pertaining to the fees that lenders are allowed to charge when closing a loan. Unfortunately, they are very open-minded on the amount of discount points and origination points that they allow lenders to charge. Lenders are allowed to charge one origination point and two discount points plus the ?usual and customary? third party closing costs that FHA deems relevant. If you combine those fees with the additional money that the lenders can earn from ?marking-up? the interest rate; lenders could make as much as $12,000 profit on a $200,000 loan.