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Are closing costs different fha versus fanie mae mortgage

by texarkenzie78356297 from Abilene, Texas. Feb 5th 2015 Reply


Cody Velkovich (Cody_NRL)
#167 ranked lender in Texas - 89 contributions

Thanks for the question, Kenzie. Closing costs will vary program-to-program, and lender-to-lender. An FHA Loan will have an Upfront Mortgage Insurance premium that is typically financed into the loan amount, as well as a monthly premium. A Conventional Loan (Fannie Mae) that has a less than 20% down payment will also have mortgage insurance, however, you as the Borrower will have the choice as to whether that premium be upfront, monthly, or both (split).Each lender will have their own costs to do your loan, and those can vary wildly depending on where you go. Also, title companies, county clerks offices, appraisers, surveyors, etc., also have their own costs. At the end of the day, typically the biggest cost that you pay during a mortgage transaction are escrow deposits for your property taxes and homeowner's insurance.I hope this helps! Feel free to reach out to me if you have more questions.Cody VelkovichNRL Mortgage

Feb 5th 2015
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Rich Bonn (RichBonn2818411723)
#177 ranked lender in Texas - 50 contributions

Yes, FHA loans require the borrower to pay (financed into the loan) a 1.75% upfront Mortgage Insurance Premium. This is added into the loan amount and may potentially be refunded to you if you refinance or pay off the home early (within the first couple of years.) FHA also charges an annual MI premium. This premium can last for the life of the loan if you put down less than 10%, Otherwise, it lasts 11 years.Some Appraisers charge a little more for FHA appraisals, as well. If you have any further questions, or would like some more guidance on the appropriate loan for you, please feel free to call me or email me. Rich Bonn 281-841-1723richbonn@leader1.comNMLS# 278696

Feb 5th 2015
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#28 ranked lender in New York - 2,236 contributions

The differences will be FHA charges 1.75% of your loan amount as up front mortgage insurance required by HUD which is financed into your loan and they typically charge a higher monthly mortgage insurance than Fannie. So technically the difference in closing costs will be the upfront mortgage insurance which doesn't come out of pocket but considered a closing cost. Overall the closing costs should be the roughly the same

Feb 5th 2015
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,927 contributions

As other have said.. the primary difference in closing costs is FHA charges 1.75% of the loan amount as an upfront mortgage insurance premium that is not refundable, but FHA will allow you to finance it. FHA also charges .80% as an annual fee broken down monthly and added to your payment.. but If you have good credit scores, then conventional 3% to 5% down is a better program because FHA's MI will be there for the life of the loan where as conventional MI can be dropped once you have paid 2 years, and reach 20% equity, and you don't have to refinance to have it removed. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Feb 5th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,524 contributions

Your out-of-pocket closing costs really don't vary much very based on program. Some programs have additional costs. For example, an FHA loans has something called up-front mortgage insurance. It is rolled into the loan, and NOT an out of pocket cost

Feb 5th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,524 contributions

Also, all lender TRUE closing cost are essentially the same. HOW YOU PAY them can vary. For example, anyone claiming significantly lower closing costs is really just charging you a higher rate to offset the costs. Have a good long talk with a local mortgage broker to discuss all your options.

Feb 5th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,225 contributions

Lots of good info above. Other than the difference in how the mortgage insurance (FHA vs. any private) is structured, the costs are essentially the same. FHA rates are generally slightly better but overall for a strong borrower conventional is usually a better option.

Feb 6th 2015
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