Question by firsthousefairy: Are 2 points for loan origination fee & loan discount normal on an FHA loan?
I am working with a lender on an FHA loan in Orlando, FL. The rate is 5.59 and the Good Faith Estimate states that the lender is asking for !.000 for a loan origination fee and 1.000 for a loan discount. Does this mean my 5.59 percent is now 7.59 percent? Is this allowed on an FHA loan? What is the likelyhood of getting a smaller fee elsewhere? I have a list of approved lenders to use- should I contact more and get other estimates. Help!!! This is my first home purchase and I’m not sure what to do. I have 20% to put down from grants and gift funds. The good faith estimate still lists mortgage insurance…shouldn’t this be unnecessary with 20% down?
Best answer:
Answer by Guitar_Junkie_
I think points are 1% of your loan amount for each point paid up front for those fees you described, not 1% point added to your rate. Yes, PMI should not be required with 20%
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