I looked into getting an FHA loan a while back but decided to wait. Whats changed since I last checked?
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.
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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."
It’s very important to do some FHA loan guideline research before entering into a new application for an FHA loan. Congressional amendments, changes in the structure of HUD or the FHA and other factors may add benefits or new requirements to your FHA loan. An excellent example of this is with the move to FHA’s streamline refinancing packages, which in many cases require less paperwork in order to be filed and processed. If it’s been more than a year since you last looked into an FHA loan, FHA mortgage or FHA reverse mortgage, check to see what new developments have occurred since last time. Your FHA approved lender can be of help, and you can search online for additional information.
