Another Victory for Folks with FHA loans!

byCherylAnnie

936 followers

11 years ago

It used to be so hard to explain, and for me to understand, this thing about paying off your FHA loan It clearly states on your loan documents up front, that there "is No Pre-payment penalty". Why, then did FHA require extra money to be paid off.?

If you paid off your conventional loan, say on the 5th day of the month, you paid interest for five days (assuming your last monthly payment was on time, it should have taken care of the previous month's interest due).

Assuming the same scenario, if you paid off your FHA loan on any day of the month other than the first day, you paid an entire month's interest! That is 30-31 days!

Something was wrong with that! Another government rip-off! We are talking about hundreds upon thousands of dollars for nothing!

"Historically, all FHA Refinance Transactions closed at month end to minimize interest overlap for the customer on their new loan and their loan being paid off. This ruling allows for an FHA Refinance Transaction that is paying off an FHA loan originated on or after January 21, 2015 to close anytime throughout the month minimizing overlap in interest. Daily interest will be computed on the FHA loan being paid off through the date of payoff only and interest on the new loan will start the date of funding." source Caliber Loans.