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UpdatedAugust 22, 2026ReviewedAugust 23, 2026Where our FHA figures come from
Closing table with settlement paperwork, a pen, house keys and stacked coins
Closing cost estimator

What you'll actually bring to the closing table

A line-by-line FHA cash-to-close estimate — lender charges, title and government fees, prepaid items, escrow reserves, upfront MIP and seller credits.

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3.5%
Min. down payment
580
Min. FICO score
$1,249,125
2026 high-cost ceiling
Quick answer

How much are FHA closing costs?

FHA closing costs typically run 2–5% of the purchase price, plus the 1.75% upfront mortgage insurance premium, which can be financed into the loan. Sellers may contribute up to 6% of the sale price toward those costs, and lender credits or DPA funds can cover much of the rest.

What this means for your mortgage

Budget 2–5% of the price, then use seller credits and lender credits to bring most of that back out of your pocket.

Reviewed by the licensed mortgage team at Simply Approved Mortgages · Last verified August 23, 2026 against HUD Handbook 4000.1

Estimate my cash to close
TL;DR

FHA closing costs: key takeaways

  • Expect 2–5% of the purchase price in closing costs
  • Upfront MIP of 1.75% is separate and can be rolled into the loan
  • Sellers can pay up to 6% of the price toward your costs
  • Prepaids (taxes, insurance, interest) are the largest single bucket
  • Lender credits trade a slightly higher rate for lower cash to close
  • DPA funds may be used for closing costs in many programs

Purchase details

Estimated cash to close
$29,948
Down payment
$14,875
Closing costs & prepaids
$15,073
Upfront MIP paid in cash
$0
Seller credit applied
-$0
Closing costs as % of price
3.55%
Max FHA seller contribution (6%)
$25,500
Total loan amount
$417,302

Fee amounts for underwriting, appraisal, survey, settlement and recording are typical market figures and vary by lender, state and property. Transfer taxes and title rates differ widely by county. Your Loan Estimate is the binding disclosure.

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Figures are illustrations based on the values you entered — not an offer, rate lock, or commitment to lend. Emailing your scenario sends it to a licensed loan officer in Florida or Colorado.

Lender charges

Origination fee
$4,101
Discount points
$0
Underwriting & processing
$995
FHA appraisal
$675
Credit report
$75
Flood certification
$25
Tax service
$85
Subtotal
$5,956

Third-party & government

Title insurance
$2,125
Settlement / closing fee
$750
Recording fees
$175
Transfer tax
$1,700
Survey
$450
Subtotal
$5,200

Prepaids & escrow reserves

Prepaid interest (15 days)
$1,115
Homeowner's insurance (12 mo)
$1,400
Property tax escrow (3 mo)
$1,169
Insurance escrow (2 mo)
$233
Subtotal
$3,917

How to lower your FHA cash to close

Seller concessions — up to 6%

FHA allows interested parties (the seller, builder, or real estate agent) to contribute up to 6% of the sales price toward closing costs, prepaid expenses, discount points and the upfront MIP. That is triple the 3% cap conventional loans usually impose at low down payments. The concession cannot cover your 3.5% minimum required investment.

Lender credits

Accepting a slightly higher interest rate produces a lender credit that offsets closing costs. It raises the monthly payment, so it works best when you plan to refinance or sell within a few years.

Down payment assistance

Many DPA programs, including the Simply Approved Mortgages DPA Program, can be applied to closing costs as well as the down payment, which is often the difference between closing this month and saving for another year.

Gift funds

FHA permits 100% of the down payment and closing costs to come from a documented gift from a family member, employer, labor union, close friend with a clearly defined interest, or an approved government or charitable entity. The donor signs a gift letter and the transfer must be traceable.

Shop the services you're allowed to shop

Your Loan Estimate lists services you can shop for — title, settlement, survey and pest inspection in most states. Those line items vary by hundreds of dollars between providers.

Price a real FHA scenario

See live wholesale FHA pricing for your exact scenario — Florida and Colorado primary residences. Provider pricing only, never an estimate. Not a lock, approval or commitment to lend.

Open the FHA pricing tool

Closing cost questions

How much are FHA closing costs?

FHA closing costs typically run 2% to 5% of the purchase price, plus prepaid items and escrow reserves. They include lender fees, appraisal, title insurance, recording and transfer taxes, prepaid interest and homeowner's insurance, and an initial tax and insurance escrow deposit.

Can the seller pay my FHA closing costs?

Yes. FHA permits interested-party contributions of up to 6% of the sales price toward the borrower's closing costs, prepaid expenses, discount points and upfront MIP. The contribution cannot be applied to the 3.5% minimum required investment.

Is FHA upfront MIP part of closing costs?

It is a closing cost, but most borrowers finance the 1.75% upfront MIP into the loan amount instead of paying it in cash, so it does not increase the money due at the closing table.

Ready to see what you qualify for?

Talk with a licensed FHA broker about your scenario. Licensed in Florida and Colorado.

Start My ApprovalCall 877-813-7219

Quick answers

Can closing costs be rolled into an FHA loan?
Only the upfront MIP can be financed; other closing costs must be paid by you, the seller, a lender credit, or DPA.
What's the biggest closing cost?
Prepaid property taxes and the first year of homeowner's insurance, usually followed by title and escrow fees.
Who pays for the FHA appraisal?
The buyer, typically $600–$800, paid up front when the appraisal is ordered.
Who chooses the title company?
It varies by state and contract. Federal rules give the borrower the ability to shop for certain services listed on the loan estimate.
What are prepaids and escrows?
Prepaid interest, the first year of homeowners insurance, and initial tax and insurance escrow deposits. They are cost of ownership, not lender fees.
Can closing costs be rolled into an FHA purchase loan?
Not into the base loan amount on a purchase. They are covered by cash, seller concessions, lender credits, or eligible assistance.
What is a lender credit?
The lender pays part of your costs in exchange for a higher interest rate. It lowers cash to close and raises long-term cost.
Are discount points worth it?
It depends on how long you keep the loan. Compare the monthly savings against the upfront cost to find the break-even month.
Can costs change after the loan estimate?
Some can, within federal tolerance rules. Changed circumstances allow revisions, and the Closing Disclosure must reconcile them.
Does the seller ever pay all closing costs?
A seller may contribute up to 6% of the price toward costs on FHA, which in some negotiations covers all of them.
What is the cash-to-close number?
Down payment plus closing costs and prepaids, minus credits, deposits, and any assistance — the figure on the final Closing Disclosure.

Sources for this page

Program rules and figures on this page are taken from the primary government sources below, not from third-party summaries.

Simply Approved Mortgages is not affiliated with or endorsed by HUD, FHA, or any government agency.

Included with your FHA estimate

Get your FHA Pre-Approval Summary.

Complete the short form and we send back a full FHA breakdown: your county loan limit, the minimum FHA down payment, financed upfront MIP, monthly mortgage insurance, and an estimated payment — plus whether down payment assistance can cover your cash to close.

  • Maximum FHA loan amount for your county
  • Minimum FHA down payment and cash-to-close estimate
  • Upfront and annual MIP included
  • Estimated monthly payment with taxes and insurance
Get my FHA estimate

Takes about 3 minutes · No obligation · Summary emailed and shown on screen

Illustration only, generated from the information you enter. Not a Loan Estimate, pre-qualification, commitment to lend, or approval. Subject to appraisal, credit and income review, FHA guidelines, and final lender approval. Equal Housing Opportunity.

FHA Estimate Summary
Purchase price
$385,000
Down payment (3.5%)
$13,475
Base loan amount
$371,525
Financed UFMIP (1.75%)
$6,502
Est. monthly payment
Shown in your summary

Sample figures for illustration only — not a quote, rate lock, offer of credit or commitment to lend. Simply Approved Mortgages · NMLS #2620881 · Equal Housing Opportunity

Weighing it up

Pros and cons of FHA financing

The trade-offs below are specific to FHA financing. Reviewed August 23, 2026 against HUD Handbook 4000.1 and the current HUD county loan limit file.

What works in your favor

  • 3.5% down from a 580 FICO, with 100% of the down payment giftable.
  • Seller contributions of up to 6% of the sale price toward closing costs.
  • No income caps, and higher DTI is possible with documented compensating factors.

What to plan around

  • Annual mortgage insurance for the life of the loan at 3.5% down.
  • County loan limits cap the financed amount, not the purchase price.
  • HUD minimum property standards apply at appraisal.
Worked example

The FHA numbers behind this page

A $425,000 example shows the cash and loan structure FHA produces before pricing is added.

The FHA numbers behind this page
Purchase price$425,000
FHA down payment at 3.5%$14,875
Base loan amount$410,125
Upfront MIP at 1.75%, financed$7,177
Conventional 20% down for comparison$85,000

Illustration only — not a quote, rate lock, offer or commitment to lend. Subject to lender underwriting and approval.

Document checklist

What documents you need for FHA financing

This is the set an FHA underwriter typically asks for. Having it ready before you write an offer is the single biggest difference between a two-week and a six-week file.

Identity and residency

  • Government-issued photo ID and Social Security number
  • Two-year residence history with landlord contact where you rented

Assets

  • Two months of statements for every account used for down payment or reserves
  • A signed gift letter plus the donor's source of funds for any gifted money
  • Retirement statements when reserves are drawn from those accounts

Property and credit

  • Fully executed purchase contract with all addenda
  • Homeowners insurance quote, plus flood coverage where required
  • Written explanation for credit events, plus bankruptcy or foreclosure paperwork if applicable
Income documentation

Self-employed vs. W-2 employed: what it means for your FHA loan

Income documentation is where most FHA files slow down, and it depends on how you are paid. FHA does not apply a different credit score, down payment or county limit to self-employed borrowers — it applies a different documentation standard.

FHA documentation differences between W-2 employed and self-employed borrowers
ItemW-2 employedSelf-employed
History requiredTwo-year employment history, with gaps explained. A job change inside the same field is usually fine.Generally two years of self-employment. A shorter history can sometimes be considered when there is documented prior experience in the same line of work.
How income is calculatedBase pay from pay stubs and W-2s. Bonus, overtime and commission generally need a two-year history to be averaged in.Net income from tax returns, averaged and adjusted for allowable add-backs such as depreciation. Write-offs that reduce taxable income also reduce qualifying income.
Documents that open the file30 days of pay stubs, two years of W-2s, and a verification of employment.Two years of personal and business returns, year-to-date P&L and balance sheet, and evidence the business is still operating.
Verification at closingThe employer is re-verified shortly before closing; do not change jobs mid-process without telling your loan officer.Continued existence of the business is re-verified close to closing, typically through a third-party or licensing check.
Most common delayUnexplained gaps, a new job with variable pay, or a VOE the employer never returns.A declining year over year, or a large deduction that removes the very income needed to qualify.
What we suggestGet the VOE moving on day one — it is the item most often outstanding at the end.Have your accountant produce the year-to-date P&L before you shop, so qualifying income is known before you write an offer.

If you are W-2 employed

  • Pay stubs covering the most recent 30 days
  • W-2 forms for the last two years
  • A verification of employment; HUD Handbook 4000.1 Update 18 tightened the written and electronic VOE rules, so expect the employer record to be verified directly
  • Documentation of bonus, overtime or commission income if you want it counted

If you are self-employed

  • Two years of personal federal tax returns, all schedules
  • Two years of business returns for a partnership, S-corp or C-corp, plus K-1s
  • A year-to-date profit and loss statement and balance sheet
  • Business license, CPA letter or equivalent evidence the business is active

General FHA documentation guidance per HUD Handbook 4000.1, including Update 18 changes to written and electronic verification of employment. Requirements vary by borrower, property, lender and program, and all loans are subject to lender underwriting and approval. Sources: HUD Handbook 4000.1

Simply Approved Mortgages Expert Insight
Closing-cost commentary · Last reviewed August 23, 2026

Negotiate the seller credit before you shop for lender fees

FHA permits interested-party contributions up to 6% of the sales price, and in our experience that single negotiation point moves more cash to close than any fee comparison. We identify which costs are seller-payable, which are lender fees we control, and which are fixed third-party items so the credit gets applied where it does the most good.

Our recommendation

Ask for the seller credit in the offer — it is the largest cash-to-close lever.

Simply Approved Mortgages · licensed mortgage broker · NMLS #2620881 · Equal Housing Opportunity
Ask Simply AI

Ask SAM anything about FHA loans in the United States

SAM is the Simply Approved Mortgages AI assistant, grounded in HUD Handbook 4000.1 and the 2026 HUD county limit file. It answers general FHA questions instantly. A licensed loan officer reviews every scenario before any terms are confirmed.

Hi — I'm SAM. Ask me about FHA loan limits, credit, mortgage insurance, down payment assistance or what an underwriter will need from you. General education only: I don't quote rates, and nothing I say is an offer or commitment to lend.

General information only — not advice, a quote, or an offer of credit.

Popular on this page

Talk to a licensed loan officer 877-813-7219

Ask Simply AI provides general educational information about FHA loan programs. It is an automated assistant, may be incomplete or out of date, and does not provide legal, tax or financial advice. Nothing it produces is a rate quote, APR, pre-approval, offer or commitment to lend. Simply Approved Mortgages LLC (NMLS #2620881) arranges residential mortgage loans in Florida and Colorado. Eligibility, terms, conditions and availability vary by borrower, property, lender, loan program and state, and all loans are subject to lender underwriting and approval. Equal Housing Opportunity.

Where to go next

Continue with the FHA topic that matches where you are, or talk to a licensed loan officer about your own numbers.

How FHA loans work

What FHA insurance is and who it fits.

FHA requirements

Credit, income, DTI and property rules.

FHA credit score rules

580 vs 500–579 and what they change.

Down payment & assistance

3.5% minimum, gift funds and DPA options.

Mortgage insurance (MIP)

Upfront and annual MIP, and how long it lasts.

FHA loan limits

County-by-county HUD maximums.

FHA closing costs

What you pay and what a seller can cover.

FHA loan programs

203(b), 203(k), streamline, cash-out and more.

FHA calculators

Payment, affordability, MIP and break-even tools.

First-time buyer guide

Step-by-step from budget to closing.

Start My Approval Contact a licensed loan officer Submitting a request is not an application, approval or commitment to lend.
Down Payment Assistance

The FHA DPA Program

Short on cash to close? Ask about the FHA DPA, offered through Simply Approved Mortgages: 2.5%, 3.5%, or 5% of your loan amount toward your down payment and closing costs, structured as a 10-year repayable second lien at your first-mortgage rate + 2%. FICO 580+, primary residence only — it's an option on every loan program on this site.

How it works

Three tiers. Real money toward your home.

  • 2.5% / 3.5% / 5% of the lesser of purchase price or appraised value
  • Pairs with FHA, Conventional, VA, and USDA first mortgages
  • 10-year repayable second lien — no silent forgivable strings
  • Available to FICO 580+ primary-residence buyers
Full DPA program details
Not available in: New York, Washington, U.S. Virgin Islands, Guam, Northern Mariana Islands, and American Samoa. All loans subject to underwriting approval and program guidelines.
Amount calculator & eligibility checker

See how much assistance you may qualify for

Enter a purchase price, pick an assistance tier, and confirm property and residency. Results are illustrative — not a quote or commitment.

Simply Approved Mortgages DPA

DPA amount calculator & eligibility checker

Estimate 3.5% assistance on the lesser of price or appraisal, layered over a 30-year fixed FHA first mortgage.

Estimated DPA
$14,000
3.5% of $400,000
2nd-lien P&I
$174
10-yr · 8.500%

Amount calculator

Assistance tier
Lesser of price or appraisal
$400,000
DPA at 3.5%
$14,000
2nd-lien term
10-year fixed, repayable
2nd-lien rate
8.500%
Monthly P&I
$174/mo

Illustrative only — not a quote, lock, offer, or commitment to lend. Binding figures appear only on your Loan Estimate and Closing Disclosure.

Eligibility checker

Documentable qualifying income?

Willing to complete homebuyer education before closing?

Property in NY, WA, USVI, Guam, MP, or AS?

Answer each question above to see your preliminary result.

See Today's Rates

Figures are illustrations based on the values you entered — not an offer, rate lock, or commitment to lend. Emailing your scenario sends it to a licensed loan officer in Florida or Colorado.

Preliminary self-check only — no credit pulled. Not a quote, lock, offer, or commitment to lend. Simply Approved Mortgages is not affiliated with HUD, FHA, VA, USDA, FHFA, or any government agency. Equal Housing Opportunity. NMLS# 2620881.

Our pricing philosophy

Transparency. Simplicity. Consumer Choice.

At Simply Approved Mortgages, we believe borrowers deserve clear information, professional guidance, and access to competitive mortgage solutions.

Our company is built around a straightforward philosophy: provide transparent mortgage guidance, maintain a consistent compensation structure on most transactions, and help borrowers make informed financing decisions based on their individual needs and goals.

For many mortgage transactions, Simply Approved Mortgages typically operates using a lender-paid compensation structure of approximately 1.50%. Actual compensation may vary based on lender requirements, loan program, state regulations, loan amount, and other transaction-specific factors.

We believe transparency helps consumers better understand the mortgage process and make informed decisions when comparing financing options.

Our promise

Mortgage financing should be understandable, transparent, and focused on helping consumers make informed decisions.

Our goal isn't to maximize compensation per transaction. Our goal is to build lifelong client relationships through transparency, service, and competitive mortgage solutions.

Why compensation transparency matters

Understanding all aspects of the financing process

Many borrowers spend significant time comparing interest rates, but may be less familiar with how mortgage companies and loan originators are compensated.

Compensation structures can vary among lenders, mortgage brokers, banks, credit unions, and other mortgage providers. Compensation is only one component of a mortgage transaction and should be evaluated alongside interest rates, APR, lender fees, discount points, closing costs, loan features, and overall loan suitability.

At Simply Approved Mortgages, we believe consumers benefit from understanding all aspects of the financing process before making a decision.

Interactive illustration

See how compensation scales by loan amount

Move the slider to compare a hypothetical 1.50% Simply Approved Mortgages compensation structure with a hypothetical 2.75% used by some other lending options. For educational purposes only.

$400,000
$50,000$2,000,000
Typical market comp at 2.75%$11,000
Simply Approved Mortgages at 1.50%$6,000
Potential closing cost difference
Hypothetical impact on lender compensation only
~$5,000

For illustration only. Figures are hypothetical and not a quote, offer, rate lock, or guarantee of savings. Lender compensation is one component of closing costs; actual loan terms, interest rates, fees, APR, and total costs vary by program, loan amount, credit qualifications, property, occupancy, state, and market conditions.

Illustrative compensation comparison

Comparing a hypothetical 1.50% to a hypothetical 2.75%

The example below compares a hypothetical 1.50% compensation structure used by Simply Approved Mortgages to a hypothetical 2.75% structure used by some other lending options, solely for educational purposes.

Loan AmountSimply Approved Mortgages (1.50%)Other lending options (2.75%)Difference
$250,000$3,750$6,875$3,125
$350,000$5,250$9,625$4,375
$500,000$7,500$13,750$6,250
$750,000$11,250$20,625$9,375
$1,000,000$15,000$27,500$12,500

These examples are illustrative only and are intended to demonstrate how different compensation percentages may produce different compensation amounts based on loan size.

These examples do not represent borrower fees, interest rates, APR, closing costs, loan terms, pricing, or savings, and should not be interpreted as a guarantee that any borrower will receive lower costs or better loan terms.

Our commitment to borrowers

Our goal is to provide

  • Professional mortgage guidance
  • Transparent communication throughout the loan process
  • Access to a broad range of mortgage programs
  • Competitive financing options based on borrower qualifications
  • A streamlined application and approval experience
  • Support for homebuyers, homeowners, and real estate investors
A team-focused approach

Support for every type of borrower

Whether you're purchasing a home, refinancing an existing mortgage, consolidating debt, or financing an investment property, our team is committed to helping you evaluate available options and make informed decisions.

Compare more than just the interest rate

When evaluating mortgage options, borrowers should consider the complete financing package

  • •Interest Rate
  • •Annual Percentage Rate (APR)
  • •Lender Fees
  • •Discount Points
  • •Closing Costs
  • •Loan Features and Flexibility
  • •Prepayment Terms
  • •Product Eligibility Requirements
  • •Customer Service and Support

The most appropriate mortgage solution depends on each borrower's individual financial circumstances, objectives, qualifications, and preferences.

Important Disclosure: Simply Approved Mortgages LLC typically utilizes a lender-paid compensation structure of approximately 1.50% on many mortgage transactions; however, compensation may vary based on lender requirements, loan program, state law, loan amount, borrower qualifications, and other transaction-specific factors. Compensation is only one component of mortgage pricing and does not, by itself, determine interest rates, APR, lender fees, closing costs, loan terms, or overall borrower costs. The information provided on this page is for general educational and informational purposes only and should not be construed as mortgage advice, a commitment to lend, an offer to extend credit, a rate quote, a loan approval, or a guarantee of savings. All mortgage loans are subject to credit approval, underwriting requirements, property approval, and program eligibility guidelines. Borrowers should carefully review all disclosures, including the Loan Estimate and Closing Disclosure, before proceeding with any mortgage transaction. Simply Approved Mortgages LLC • NMLS #2620881 • Equal Housing Opportunity.

Ready when you are

Get pre-qualified in minutes — no obligation.

Talk to a licensed Simply Approved Mortgages loan officer. We'll review your goals, walk through FHA, Conventional, VA, USDA, and DPA options, and give you straight answers — same day.

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Simply Approved Mortgages • NMLS #2620881 • Licensed in Colorado and Florida

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