Special offer

FHA Loans in Riverside CA - How much are the closing costs? Part 1

By
Real Estate Agent with Pedersen Real Estate 01435175

FHA Loans are HOT!  But how much are closing costs?

It's true - FHA loans are hot.  A large number of Riverside and Corona homes that have been sold in the last couple of years have been financed with FHA loans.  FHA loans are allowing many first-time buyers  to purchase a home with very little cash to put down.  The minimum down payment required by FHA is 3.5%.  The maximum limit for FHA loans is $500,000 for both Riverside and San Bernardino Counties.  

Since many people in the Riverside and Corona are using FHA loans, I want to provide some education about FHA loan closing costs.  FHA loan closing costs are regulated by HUD. There are maximum fee limits in place so that the FHA loan program remains affordable to home buyers
.

I’m going to talk about only part of the closing costs in this post.  Always ask for a Good Faith Estimate from any lender you are seriously considering using for your home loan.  They are required to provide them once you actually fill out an application for a loan.

There are several types of fees that you will see.  Here is a brief explanation of some of these fees: 

Lender Fees

Loan Origination: This fee is usually known as a loan origination fee but sometimes is called "points." It covers the lender's administrative costs for processing the loan. FHA allows only a maximum of 1% of the loan amount. Generally, the buyer pays the fee, unless otherwise negotiated.

Loan Discount: Also often called "points" or "discount points," a loan discount is a one-time charge by the lender to either lower the interest rate at which the lender would otherwise offer with your loan.  It can also be used to lock-in the interest rate for an extended period.  This fee may vary.

Appraisal Fee: This charge pays for an appraisal report made by an independent FHA appraiser. Typically range from $300 - $500.

Credit Report Fee: This fee covers the cost of a credit report, which shows your credit history. Usually $40 - $55.

Lender's Inspection Fee: This charge covers inspections made by employees of your lender or by an outside inspector that the lender requires.

Mortgage Insurance Application Fee: This fee covers the processing of an application for mortgage insurance.  Note:  FHA loans require Mortgage Insurance Premium – some of it is charged up front and some is paid monthly in your mortgage payment.

Assumption Fee: This is a fee which is charged when a buyer "assumes" or takes over the duty to pay the seller’s existing mortgage loan.  We don’t see that type of loan very often.

Mortgage Broker Fee: Fees paid to mortgage brokers would be listed here.

Loan Processing Fee: This fee is for the administrative cost of processing your loan files.

Underwriting Fee: This is a fee charged by the investor for underwriting the submitted loan file and all of its paperwork.

Wire Fee: This is a fee charged by investor for wiring out the required funds to close the loan.

Click here to read my follow-up post with additional information about FHA loan closing costs. 

If you are thinking of buying or selling a home in Riverside or Corona, call me 951-840-5212 or send me an e-mail  vicki@pedersen-team.com    Visit my website, http://Pedersen-Team.com

Search for homes                                        What's my home worth?    

 Copyright © 2009 By Vicki Pedersen, All Rights Reserved.*FHA loans- buying a home Riverside-Riverside CA homes*

Posted by

Vicki Pedersen 
Pedersen Real Estate
951-840-5212
vicki.pedersen@gmail.com
DRE#01435175

www.Riverside4Homes.com

Comments (6)

Janie Coffey
First Coast Sotheby’s International Realty - Ponte Vedra, FL
Uniting Extraordinary Homes w/ Extraordinary Lives

we in Miami are also seeing a spike in FHA, anything that works, I am all for it!  PS love the orange tree background

Feb 22, 2009 11:51 PM
Vicki Pedersen
Pedersen Real Estate - Riverside, CA
Providing Exceptional Real Estate Service

Janie, thanks for stopping by and reading my post.  Orange trees are great - especially this time of year when they are in bloom.  The smell is amazing!

Feb 24, 2009 04:01 PM
Anonymous
Diane Lynette

Great Idea vicki.  keeping the client informed is great.

Who do you use for your FHA lender for your clients.

Do you use anybody in specif?  Do you know of any company that has been around the longest

Mar 27, 2009 10:55 AM
#3
Vicki Pedersen
Pedersen Real Estate - Riverside, CA
Providing Exceptional Real Estate Service

Diane, I use Janel Noe at Wells Fargo.  She has done most of my client's FHA loans.  You can reach her by e-mail janel.m.noe@wellsfargo.com or by phone (951) 377-2263.  She's terrific. 

Mar 27, 2009 04:30 PM
Chad Ellsworth
American Way Real Estate - Hemet, CA

Funny only a few years ago nobody was even talking about FHA, but there back! Thanks for the info Diane..

Chad

Sep 16, 2009 04:07 PM
Anonymous
Melanie

The Rent Rite Directory (www.therrd.com) is website and database for property managers, landlords, and leasing agents to track and record skips, evictions, and criminal activity that occurs on property. It is a means of real-time communication between properties to share incidents that happen day-to-day. Skip tracking ,the incident reporting database, and alerts from police officers is free to users. There are also other features offered to users, such as credit and criminal background checks as well as renter's insurance. The RRD has over 1400 registered users and over 1200 incident reports for managers and leasing agents to refer to while making a decision in the leasing process. The RRD is a growing tool used in the leasing offices of apartments and can help weed out bad residents by searching a person's name to see if they are in the database for committing a lease violation on another property. The RRD is also helping to weed out Proxy Renters, or someone who is renting a unit for someone else who wouldn't normally qualify. The RRD is helping properties rent to better quality tenants by the sharing of information. Managers and leasing agents register for the RRD today! at www.TheRRD.com

May 12, 2011 05:30 AM
#6