| What types of closing costs are
associated with FHA-insured loans? |
| Except for the addition of
an FHA mortgage insurance premium, FHA closing costs are similar to those
of a conventional loan. The FHA requires a single, up-front mortgage
insurance premium equal to 2.25% of the mortgage to be paid at closing (or
1.75% if you complete the HELP program- see Question 91). This initial
premium may be partially refunded if the loan is paid in full during the
first seven years of the loan term. After closing, you will then be
responsible for an annual premium - paid monthly - if your mortgage is
over 15 years or if you have a 15-year loan with an LTV greater than 90%. |
| Can I roll closing costs into my FHA
loan? |
| No. Though you can't roll
closing costs into your FHA loan, you may be able to use the amount you
pay for them to help satisfy the down payment requirement. Ask your lender
for details. |
| Are FHA loans assumable? |
| Yes. You can assume an
existing FHA-Insured loan, or, if you are the one deciding to sell, allow
a buyer to assume yours. Assuming a loan can be very beneficial, since the
process is stream lined and less expensive compared to that for a new
loan. Also, assuming a loan can often result in a lower interest rate. The
application process consists basically of a credit check and no property
appraisal is required. And you must demonstrate that you have enough
income to support the mortgage loan. In this way, qualifying to assume a
loan is similar to the qualification requirements for a new one. |
| What should I do if I can't make a
payment on my loan? |
| Call or write to your
lender as soon as possible. Clearly explain the situation and be prepared
to provide him or her with financial information. |
| Are there any options if I fall
behind on my loan payments? |
| Yes. Talk to your lender or
a HUD-approved counseling agency for details. |
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