Financing in 76107>Question Details

H Thompson, Home Buyer in Fort Worth, TX

Reasonable FHA Origination Fees?

Asked by H Thompson, Fort Worth, TX Thu Mar 24, 2011

We've done a bit of shopping for mortgages and so far FHA seems like the best option for us, but I'm a bit concerned about the high origination fees we are being charged.
Purchase Price: $95,000
Down Payment: 3.5%
Sellers paying: 5% towards closing costs.

Excluding prepaids, escrows, title work, apraisal etc etc. these are the "origination charges" in the GFE

Loan Origination Fee $916
Doc Prep $235
Admin Fee $1095
Up-Front Mortgage Insurance (rolled into principle of loan) $916

Do these sound reasonable to you?

Thanks for your help!

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The U.S. Department of Housing and Urban Development (HUD) has removed the one percent loan origination fee cap on FHA mortgages originated on or after January 1, 2010.

While the FHA does not control interest, points or terms, there are regulations about the origination fee for an approved FHA guaranteed loan. Origination fees cover the lender's costs for issuing the FHA home loan. Depending on when your FHA loan was approved, you may only be required to pay 1% of the loan amount-this applies to all loans originated up to December 31, 2009. Those fees are capped.

FHA guaranteed home loans in 2010 and beyond are not capped or limited to that 1% origination fee. This does NOT apply to FHA Reverse Mortgages (also known as HECM loans) or 203(k) rehabilitation loans.

Check out for more details : http://fhamortgageinfo.com/
1 vote Thank Flag Link Wed Jul 22, 2015
H Thompson the loan origination fee is standard. The Up-Front MI is mandatory. The doc prep & Admin fee is based on the company you are dealing with. The only way to truly gauge the fees is speak with other mortgage companies in the area
1 vote Thank Flag Link Thu Mar 24, 2011
Looks pretty reasonable to me. UFMIP is a requirement of FHA, no way around that one at 1%.

The real question I have for you is what is your middle FICO and what rate are you being quoted or are you 'locked' right now? That would help paint a more complete picture of what your truly getting with your loan.
0 votes Thank Flag Link Fri Mar 25, 2011
The price to pay for a Loan at a great rate with only 3 1/2% down sounds reasonable to me!
0 votes Thank Flag Link Thu Mar 24, 2011
$1330 in lender fees (doc prep +admin) is high in our area but I don't know what is customary for your particular area. The loan origination fee relates to rate so without knowing what the rate is or even the specifics of your particular loan (ie credit score, etc), its impossible to say whether or not that is out of whack.
0 votes Thank Flag Link Thu Mar 24, 2011
Nothing can sound reasonable unless the entire set of documents are reviewed. Therefore no misunderstanding on particulars presented to you

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Thu Mar 24, 2011
I think these fees seem typical. You mentioned that the Seller is paying these fees and if you wrote the contract correctly, they should pick up your pre-paids as well.

5% should be plenty. What is the concern?
0 votes Thank Flag Link Thu Mar 24, 2011
Hi H Thompson,

The fees look to be reasonable. The admin fee probably covers the processing and underwriting fees which are normal. The bigger question is, what interest rate are they charging you?
0 votes Thank Flag Link Thu Mar 24, 2011
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