With FHA loans, are the prepaid items (PMI, hazard insurance, etc) the exact same with every lender?

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Obviously its a good idea to compare closing costs between lenders. But when it comes to the PREPAID ITEMS… do those vary at all between lenders or are those amounts (PMI, hazard insurance) going to be set charges?

And also, what’s the difference between section 900 and 1000 on a GFE? They both are prepaid items… just one is “advanced payment” and one is “reserves” … whats the deal?

  1. Reply
    A D
    August 6, 2011 at 11:26 pm

    MIP should be the same – 1.75% at closing and then their calculation for the monthly amount. I don’t know what it is exactly now. I understand it has increased.

    Hazard (Home owner’s) insurance depends on the insurance company you choose and the coverage you get. Usually you have to pay 1 yr + 3 months of insurance premium.

    Other prepaids are your property taxes – 3 – 4 months. Title company usually estimates this on the taxes paid the year before if the current year’s value and tax rate have not been set. So, to get the better idea of what your actual monthly escrow amount for property taxes will be is to use your sales price.

    Now, lender fees may vary, but I believe the max is set, but there can be variations.

    I don’t have a GFE in front of me, so I’m not sure what sections 900 and 1000 show. But I’m guessing that it’s like with the home owner’s insurance…You pay for 1 yr. policy premium “advance payment”, and have 3 months of reserves that sit in your escrow account. You add monthly payments to buy the next year’s policy, but always have 3 month’s reserve.

  2. Reply
    Ed Atun
    August 6, 2011 at 11:27 pm

    The loan fees will be the major difference. The prepaids are almost identical (you shop for your own hazard insurance, MIP is fixed by FHA).
    Ignore the GFE. It is not binding on the lender..

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