FHA Finally Ends its Full Month Interest Policy

Attention future homebuyers! Thanks to a regulatory mandate from the Consumer Financial Protection Bureau, the highly debated Federal Housing Administration FHA policy that required buyers who prepaid their mortgage to still pay a full month’s interest comes to an end.

Homeowners and brokers have long disputed the controversial FHA interest payment policy for decades, because many sellers were unaware of being required to pay a full month of interest when they prepaid their mortgages no matter what day of the month they settled. That meant home sellers closing on the sale of their home on the first of the month were still charged interest through the end of the month, accumulating extra interest charges they had not anticipated.

This policy is not one practiced among many lenders in the real estate industry. Lenders like Fannie Mae, Freddie Mac, and the Department of Veteran Affairs (VA) require that interest be collected only to the day of principal payoff.

This much anticipated mandate requires the FHA to make the switch by January 21st 2015 and will make many future FHA loan home buyers happy. If you’d like to find out how this new change could affect your FHA loan or to qualify for a home purchase using an FHA loan please contact the Russo Team today.

www.RussoTeam.com
602-864-1200

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