Do FHA loans come with any extra charges I should know about?
It’s funny you asked because FHA loans do tend to come with a couple of footnotes. So here’s the thing:
You need to pay a monthly insurance premium (MIP) no matter how big your down payment is
MIP is usually rolled into your APR as part of your monthly payment so you’ll barely notice it
You also need to pay an Upfront Funding Fee that can be rolled into your loan principal – or you can pay in cash
If you’re wondering what these extra fees are for, they’re to help with that government guarantee we talked about earlier – so the lender can stay cool as a cucumber knowing they’re covered in case you can’t make your payments. The fees are a way for you to split the bill with U.S. taxpayers (like yourself!).