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FHA places a maximum fee limits to ensure that the FHA loan remains affordable to borrowers. Following is the normal closing costs for a FHA loan. Most of these fees are typically paid by buyer, but it is possible to negotiate with lender or home seller to pay all or part of these fees.
Loan Origination: Sometimes this fee is also called a “point” or “points”. The fee is used to cover the administrative costs for loan processing.
Appraisal Fee: Typically the cost of appraisal fee is around $300 - $500. It is paid for an appraisal report made by independent FHA appraiser.
Credit Report Fee: The cost of credit report fee is approximately around $40 - $50. Credit report is used to show your credit history. Lenders use credit report to evaluate qualification of borrowers and loan amount.
Mortgage Insurance Application Fee: The cost of an application for mortgage insurance is paid with this fee.
Flood Certification: Like other lenders, FHA requires a flood report to ensure that the property is not in the flood zone. Otherwise, the home owner is required to get flood insurance.
Underwriting Fee: Sometimes this fee is also called, “buyers non-allowable fee”. It is charged by investor for underwriting the submitted paperwork.
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