FHA Loans: Closing The Deal. FHA loan rules require the down payment for FHA home loans and any other borrower expenses to be included in the amount due from the borrower at settlement time. Another portion of the FHA loan rules, a section titled "Disclosure of Origination Charges on the Good Faith Estimate".
The process with a foreclosure isn’t too different from buying a traditional home in the sense that you can use a VA or FHA.
One fee that’s usually mandatory is the FHA mortgage insurance premium, or MIP. It totals 1.75% of your loan amount, due at closing. You can also finance this charge as a part of your loan.
When you compare FHA closing costs to conventional closing costs, one of the major differences is the upfront mortgage insurance cost of 1.75% of the loan amount. Most of the other costs would be similar regardless as to which loan program you choose.
Our study shows closing costs as a percentage of median home value by county. To calculate closing costs we assumed a 30-year fixed-rate mortgage on each county’s median home value and a 20% down payment. We considered all applicable closing costs, including the mortgage tax, transfer tax and both fixed and variable fees.
FHA loans have a minium down payment requirement as low as 3.5%. This amount excludes any closing costs, as closing cost payments may not be counted as part of the downpayment: Closing costs (non-recurring closing costs, pre-paid expenses, and discount points) may not be used to help meet the borrower’s minimum required investment.