Closing Costs on FHA Mortgage Loans

Closing costs when buying a home are fees that every prospective home buyer should make themselves well aware of. These costs are costs aside from the down payment and mortgage costs, and these fees are made up of the costs incurred when closing on the home a person wishes to buy. These costs will vary from home to home, and when opting for an FHA home mortgage, closing costs may be covered by the builder, seller, or lender. One of the greatest benefits of a mortgage insured by the Federal Housing Administration is that these types of loans by approved lenders will allow of one of the aforementioned entities to cover some of the closing costs on a home if they should choose, whereas other lenders may not. Get a quote for free and compare FHA closing costs from multiple lenders without any obligation.

One factor that should always be kept in mind, however, is that some lenders will charge a higher rate if these closing costs are being covered by them or another party, even if they are FHA approved. One way to keep well informed of all terms of a loan, including added costs if the closing costs are covered, is to ask for a GFE, or "good faith estimate". This form is given to the borrower by the lender and outlines all of the terms and costs associated with the mortgage they are applying for. A GFE will be able to tell a prospective home buyer if his or her rates will increase when closing costs are covered, as well as any other stipulations that may be included with their desired loan. After asking for a GFE, the lender then has 3 days to provide the borrower with the form, and this will allow the borrower to shop around for a loan with better terms if they find that this is necessary, or negotiate any terms as they may see fit.