FHA Promises to Reduce Closing Costs
The FHA has promised to lower closing costs in the summer of 2010. Specifically FHA has discussed lowering the allowable seller concessions. FHA will reduce seller concessions from 6% to 3%. According to an announcement in January, the current level of 6% exposes the FHA mortgage to excess risk by creating incentives for appraisers to increase the value of these homes. The change will take place in “early summer,” according to the FHA, but a spokesperson said no specific date has been set. The FHA closing costs include fees for origination, attorneys, appraisal and inspections, title search, title insurance, credit reports, and more. FHA down payment assistance is not included as a closing cost.
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