What fees are associated with an FHA loan?

When obtaining an FHA loan, borrowers will encounter several fees. The upfront mortgage insurance premium (MIP) is a one-time payment required at the loan closing, typically 1.75% of the loan amount. Additionally, an annual MIP is paid on a monthly basis, calculated as a percentage of the outstanding loan balance. This fee varies depending on the loan term and loan-to-value ratio. Lenders may also charge an origination fee, appraisal fee, and credit report fee, among others. However, these fees can be negotiated with the lender. It is important to note that the FHA loan program allows borrowers to finance these fees along with their mortgage, reducing out-of-pocket expenses. Consulting with a mortgage professional can help borrowers understand and navigate these associated fees.