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FHA loan payoff
Posted on 3/1/12 at 8:59 am
Posted on 3/1/12 at 8:59 am
I have an FHA loan through Chase that I am closing on next week(paying off). I learned this morning that I am going to have to pay the interest for the whole month of March even though I close on March 8th. Total bullshite. I called FHA and they confirmed. I did a little research and found this LA Times Arcticle. I am getting whacked for an extra $600.
LINK
LINK
quote:
To illustrate: Say you pay off a $200,000 FHA-insured mortgage April 5. You'll be charged an extra $820 to cover interest for the remaining days of the month, according to estimates prepared by the National Assn. of Realtors, which supports Cardin's bill. If you pay off the same loan April 15, the additional interest would total $492.
This post was edited on 3/1/12 at 4:28 pm
4
Posted on 3/1/12 at 9:28 am to lsufan1971
Put up 20% then.
Posted on 3/1/12 at 10:06 am to MoreOrLes
Interest is paid in arrears. You pay March interest at closing and skip Aprils payment. Then May's payment pays April's interest. Been done like this since the invention of FIRE. 
Posted on 3/1/12 at 10:11 am to sstig
Had he put up 20% in the first place he wouldnt have to worry about FHA rules. He either didnt have it or didnt want to. Either way thats the way it works.
Posted on 3/1/12 at 10:25 am to lsufan1971
FHA loans have worked this way as long as I can remember. Any request for a payoff will be issued good through the 1st of the next month.
Posted on 3/1/12 at 10:48 am to MoreOrLes
quote:
Had he put up 20% in the first place he wouldnt have to worry about FHA rules. He either didnt have it or didnt want to. Either way thats the way it works.
:beatdeadhorse:
Posted on 3/1/12 at 2:10 pm to sstig
quote:
Interest is paid in arrears. You pay March interest at closing and skip Aprils payment. Then May's payment pays April's interest. Been done like this since the invention of FIRE.
This has nothing to do with the topic at hand. The issue is that FHA only accepts payments at the end of the month. So even if you pay it off on the 15th, you still have to pay for the interest from the 15th through the end of the month. This started LONG after the discovery of FIRE. It's simply an FHA scam that has NOTHING to do with the fact that interest is paid in arrears.
Posted on 3/1/12 at 2:16 pm to lsufan1971
I just reread your post and am confused b/c you say you are 'closing' on an FHA loan,,, then you site an article about paying one off... those are two opposite things ....
Are you paying off an FHA loan, or are you just getting one?
Are you paying off an FHA loan, or are you just getting one?
Posted on 3/1/12 at 4:27 pm to MikeBRLA
quote:
I just reread your post and am confused b/c you say you are 'closing' on an FHA loan,,, then you site an article about paying one off... those are two opposite things ....
I am the seller. My closing is next Thursday. Paying off.
This post was edited on 3/1/12 at 4:29 pm
Posted on 3/2/12 at 2:45 pm to lsufan1971
quote:
I am the seller. My closing is next Thursday. Paying off.
Gotcha... I learned about the FHA payoff the hard way also. Always pay off at the end of the month b/c you have to pay interest until then anyway. Sucks I know.
Posted on 3/2/12 at 6:53 pm to MikeBRLA
Yeah Mike, the closing comment had me thinking he was buying...the fire thing works in either scenerio.
Posted on 3/4/12 at 4:27 pm to lsufan1971
lsufan1971
True on every FHA loan, that is why I close all of my FHA refinances at the end of the month.
Are you selling or refinancing?
If refinancing, when does your lock expire? Maybe you could wait until closer to the end of the month to close. If selling, there is not much you can do.
True on every FHA loan, that is why I close all of my FHA refinances at the end of the month.
Are you selling or refinancing?
If refinancing, when does your lock expire? Maybe you could wait until closer to the end of the month to close. If selling, there is not much you can do.
Posted on 3/4/12 at 4:34 pm to sstig
quote:Yep.
Interest is paid in arrears. You pay March interest at closing and skip Aprils payment.
Bears repeating.
quote:Repeated
Interest is paid in arrears. You pay March interest at closing and skip Aprils payment. Then May's payment pays April's interest. Been done like this since the invention of FIRE.
Posted on 3/4/12 at 5:31 pm to NC_Tigah
quote:
Are you selling or refinancing?
Selling. I have been doing a lease purchase. We are waiting on a flood determination certificate to get done so that the Flood zone can be determined (new maps in Zachary). If we don't close by the 8th they will owe me another months lease and will probably close at the end of the month. I am kinda hoping the flood determination takes longer than expected.
Posted on 3/5/12 at 4:37 pm to lsufan1971
I have been doing a lease purchase. We are waiting on a flood determination certificate to get done so that the Flood zone can be determined (new maps in Zachary). If we don't close by the 8th they will owe me another months lease and will probably close at the end of the month. I am kinda hoping the flood determination takes longer than expected.
Can you request that they close near the end of the month and then pro-rate their lease/rent for the month.
Can you request that they close near the end of the month and then pro-rate their lease/rent for the month.
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