not, there is certainly anything you really need to be cautious about. Although FHA money don’t let to have prepayment charges, you are expected to spend the money for full month’s demand for which you re-finance otherwise pay back the loan as the FHA means full-month interest payoffs.

In other words, for those who refinance the FHA loan into January 10th, you might have to shell out attract towards remaining 21 weeks, even when the mortgage is theoretically paid.

It is brand of a backdoor prepay penalty, plus one that can likely to be modified (removed) soon for coming FHA borrowers. When you are a recent FHA loan manager, you may want to promote otherwise refinance at the conclusion of the newest times to get rid of it extra notice bills.

Update: As expected, they got rid of this new type of post-payment focus. To own FHA money signed on otherwise shortly after , interest simply feel compiled from day the borrowed funds closes, as opposed to the end of the few days. (more…)