Financing in 95757>Question Details

Dave,  in Folsom, CA

FHA loan Q: Can the 2.25% FHA cost be paid as part of closing costs instead of adding to loan??

Asked by Dave, Folsom, CA Wed Apr 7, 2010

From what I hear, it is mandatory to add this cost to the loan and it CAN'T be paid as part of closing costs.
Is that true?

Have a short sale approval where the bank is giving a 3% credit for all NRCC/RCC.
I'd like my buyers to maximize that credit without leaving anything on the table.

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Yes it can be paid by any party to the transaction, buyer, seller or lender. But whoever pays it must pay all of it, so if you roll it into the loan, all of it must be rolled into the loan. If the seller pays it, the seller must pay all of it, etc.

If you do not plan on staying there or keeping the loan very long, having the lender pay it from yield may be the best move.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue May 22, 2012
I would like to add one more thing, in addition to the 3% seller's credit towards the buyer's closing costs, NRCC/RCC, if that is still not enough, the borrowers will receive lender's credit that could be used to payoff the upfront MIP..

All together, the borrower will achieve his objective not to include the upfront MIP into his loan amount.
0 votes Thank Flag Link Tue May 22, 2012
Thanks for your replies. A follow-up question. Does this need credited as the last credit (after accounting for the rest of lender and escrow/title costs)?
Is there a restriction in that regard?
I looked up the FHA website and didn't find any document that could clarify that.

Thanks!
0 votes Thank Flag Link Thu Apr 8, 2010
This cost can be added to the loan - or - paid in cash up front.

I hope it was not the mortgage banker that told you it could not be paid up front in cash.

If so - time to find another banker!

Gerry Dunn - Associate Broker
Serving Maryland, D.C. and Northern Virginia
Over 27 years

gerry@MyPotomac.com
0 votes Thank Flag Link Thu Apr 8, 2010
The FHA upfront mortgage insurance premium can either be rolled into the mortgage or paid as a closing cost at the settlement table.

Whatever portion of the seller concession is not used is returned to the seller at closing. So, you will want to spend every dome. Seller contributions can be use towards closing costs, prepaids, escrows, the UFMIP, and towards points to buy down the mortgage rate.
0 votes Thank Flag Link Thu Apr 8, 2010
Yes you can have it paid at closing, but it has to be paid in full to the best of my knowledge. No partially financing the ufmip.
0 votes Thank Flag Link Wed Apr 7, 2010
Yes, if the buyer has the funds to pay up front, it can be paid in full, at closing.
0 votes Thank Flag Link Wed Apr 7, 2010
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