Important FHA Interest Calculation Change - Point Escrow Tip of The Day!

Posted by The Cascade Team Real Estate on Tuesday, September 16th, 2014 at 1:31pm

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Great news!  Effective on January 21, 2015. Interest calculated on payoff statements for FHA loans will be based on actual per-diem interest. This is similar to all other loan products.

Under current guidelines, a homeowner with an FHA loan is responsible for the mortgage interest through the end of the month regardless of the day in that month they closed.  For Example: a homeowner sells home and sets a closing date of October 5th.  The seller would still be responsible for interest calculated through October 31st,  the end of the month.  This is also why under current guidelines lenders always try to close FHA refinance loans at the end of the month. 

Under the new January 2015 guideline, mortgage payoff interest on an FHA loan would be calculated through the actual close of escrow date only. 

This is a nice selling point if your competing for a listing and the seller currently has an FHA loan to pay off. Why? Your competition may not be aware of the change saving your seller money a closing.  Bringing this up will give you the edge as your seller will question why your competition never made mention of it.  YOU’RE THE EXPERT!! 

Here is link if you would like more information: 

https://www.federalregister.gov/articles/2014/08/26/2014-20214/federal-housing-administration-fha-handling-prepayments-eliminating-post-payment-interest-charges

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