|Fha Fees And Financing |
|FHA Funding Fee | FHA Loans|
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What Is The FHA Funding Fee
The Federal Housing Association is a branch of the government that works to ensure that people receive fair housing with fair terms. This branch of government is involved with ensuring that the homes offered on the market are safe, secure, of proper value and that those who are selling the home properly represent themselves and the home. The FHA is involved in home loans and property scam protection. To fund all of this activity, the Federal Housing Association exacts a fee on all home sales. This FHA Funding Fee is separate than the sales, school or property tax.
The FHA Funding fee is a set rate of 1.5% of the amount of the home sale. This amount can be added into the home loan, although additional penalties and higher rates may be exacted to the loan. There may also be an origination fee that is also exacted by the Federal Housing Association. These fees are different than the closing fees that tend to be anything from 3% to 6% of the home cost. These closing fees are bank fees that are used to increase their profits for reinvesting and are justified as paperwork costs.
As aforementioned, the FHA Funding fee is important to the funding of the policing department of the housing market. This 1.5% of the home cost can help to ensure that the home is protected from mortgage fraud, flipping and is properly represented by those selling the home. Each of the concerns that the Federal Housing Agency works to prevent and ensure is a vital aspect of the housing market. Without the federal policing of these areas, the chances of serious loss by the prospective purchaser are much higher. These loses can destroy families and bankrupt entire communities if committed at a high rate.
Mortgage fraud is a serious business. Mortgage fraud is when an individual poses as a mortgage consultant and designs a mortgage that is guaranteed to fail. As this mortgage fails, the consultant regains ownership of the home. The home owner loses the home, loses the money and takes a hit on his credit score that may be very difficult to recover from. This fraud leaves people homeless and at a loss of what happened. Most mortgage fraud specialists are able to construct the mortgage so that it looks very tempting to those who do not understand the mortgage process such as first time home owners. The preventing and prosecution of mortgage fraud is a major expense that the FHA Funding fee covers.
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