The benefits of an FHA home loan for many borrowers far outweigh the FHA payoff rule, but it’s more about the principle than the money for many people.
If you have an FHA home loan and pay it off before maturity, at closing, you’re expected to pay for a whole month’s interest, no matter what day of the month you settled. So, even if you close on the first day of the month, you still have to pay interest for the entire month.
As a result, the timing of paying off an FHA mortgage (often as a result of selling a home) has been essential to avoid payment of additional interest. The problem is that buyers typically schedule the closing on a home, making it difficult for sellers to time the closing to avoid excess interest charges.
FHA Committed to End the Full-Month Interest Payoff Policy by January 21, 2015
The FHA has committed to change its full-month interest payoff policy by January 21, 2015, due to a regulatory mandate from the Consumer Financial Protection Bureau.
Learn more in the Los Angeles Times article: Controversial FHA payoff rule to end.
Marimark Mortgage
Marimark Mortgage is based in Tampa, Florida, and proudly serves homebuyers and homeowners in all of Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application, or contact us direct.
The Marimark Mortgage Newsletter will keep you informed with important events in the mortgage industry that could impact your finances.
We especially focus on ways to save money on your current and future mortgages. And, we continually share the information we share with our clients, because we believe informed consumers are the best consumers.
Real estate agents, and other professionals in the industry, will receive an ongoing wealth of information that will help them serve their clients.
