Buying a home in Tampa, FL with an FHA loan is a great option for first-time homebuyers and those with lower credit scores. FHA loans offer low down payments (as little as 3.5%), flexible requirements, and government backing. However, like all mortgages, FHA loans come with closing costs that buyers need to be prepared for.
In this guide, we’ll break down what FHA loan closing costs include, how much you can expect to pay in Tampa, and how to reduce your expenses to save money.
What Are FHA Loan Closing Costs?
Closing costs are the fees and expenses associated with finalizing a mortgage. These costs cover everything from loan processing and underwriting to title insurance and property appraisals.
For FHA loans, closing costs typically range between 2%–6% of the loan amount. For example, if you’re purchasing a $300,000 home in Tampa, you might pay between $6,000 and $18,000 in closing costs.
What Closing Costs to Expect with an FHA Loan in Tampa
Here’s a breakdown of the most common FHA loan closing costs:
1. FHA Upfront Mortgage Insurance Premium (UFMIP)
✅ Cost: 1.75% of the loan amount
✅ What It Covers: This is an FHA-required fee that helps insure the loan. It can be paid upfront at closing or rolled into the loan balance to reduce out-of-pocket costs.
2. Lender Fees
✅ Cost: 0.5%–1% of the loan amount
✅ What It Covers: These fees include loan origination charges, underwriting fees, and processing fees. The lender uses these fees to cover administrative costs of issuing the loan.
3. FHA Appraisal Fee
✅ Cost: $450–$750 in Tampa
✅ What It Covers: An FHA-approved appraiser evaluates the home to ensure it meets FHA Minimum Property Standards (MPS) and determines its fair market value.
4. Home Inspection (Optional but Recommended)
✅ Cost: $300–$600
✅ What It Covers: While not required, a home inspection helps identify any potential issues before purchase. This can save you from unexpected repair costs later.
5. Title Insurance & Title Search Fees
✅ Cost: $1,000–$2,000
✅ What It Covers: Ensures that the property’s title is clear of any liens, ownership disputes, or legal claims that could interfere with your ownership.
6. Government Recording & Transfer Taxes
✅ Cost: $500–$1,500
✅ What It Covers: Covers the cost of legally recording your mortgage and deed with the county. Florida also charges a state documentary stamp tax on mortgage transactions.
7. Prepaid Property Taxes & Homeowners Insurance
✅ Cost: Varies based on home value and insurance policy
✅ What It Covers: Lenders require homeowners to prepay property taxes and insurance to establish an escrow account. This ensures future payments are covered.
8. Discount Points (Optional)
✅ Cost: 1% of the loan amount per point
✅ What It Covers: Borrowers can purchase discount points to lower their mortgage interest rate, reducing monthly payments over time.
How to Save on FHA Loan Closing Costs in Tampa
While closing costs are unavoidable, there are several ways to reduce how much you pay.
Negotiate Seller Concessions
One of the biggest benefits of an FHA loan is that sellers can contribute up to 6% of the home price toward closing costs. This means you can negotiate with the seller to cover some or all of your closing costs, reducing your upfront expenses.
Apply for Down Payment & Closing Cost Assistance Programs
Tampa and the state of Florida offer several assistance programs to help first-time and low-income buyers with closing costs. Some programs to explore include:
- Florida Housing FHA Down Payment Assistance Programs
- City of Tampa DARE (Down Payment Assistance for Employees)
- Hillsborough County First-Time Homebuyer Assistance Program
These programs can provide grants or low-interest loans to help with closing costs and down payments.
Ask the Lender for a No-Closing-Cost Loan
Some lenders offer no-closing-cost loans, where they cover some or all closing costs in exchange for a slightly higher interest rate. This can be a good option for buyers who don’t have upfront cash but want to keep their monthly payments manageable.
Compare Lenders and Shop Around
Different lenders charge different fees, so comparing multiple lenders can help you find the best deal. When shopping for a mortgage, ask for a Loan Estimate (LE) from each lender and compare:
✅ Interest rates
✅ Origination fees
✅ Discount points
✅ Other lender charges
Close at the End of the Month
If you close near the end of the month, you’ll pay less in prepaid interest since your first mortgage payment will be due later. This small timing adjustment can save you money at closing.
Roll FHA UFMIP into Your Loan
Since the FHA Upfront Mortgage Insurance Premium (UFMIP) is 1.75% of the loan, paying it upfront can be costly. Instead, you can roll this fee into your loan balance, reducing out-of-pocket expenses at closing.
Use Lender Credits
Some lenders offer lender credits, where they agree to cover part of the closing costs in exchange for a slightly higher interest rate. This is another way to reduce upfront costs.
Final Thoughts: Be Prepared & Save on FHA Loan Closing Costs
Understanding FHA loan closing costs is essential for budgeting and reducing upfront expenses when buying a home in Tampa, FL. While closing costs can range from 2%–6% of the loan amount, there are multiple ways to save—from negotiating seller concessions and applying for assistance programs to rolling certain fees into the loan.
By planning ahead and exploring your options, you can maximize your savings and reduce out-of-pocket costs, making homeownership more affordable.
Ready to Buy a Home with an FHA Loan in Tampa?
Start by getting pre-approved with an FHA lender and explore your options for assistance programs and closing cost savings. The more you prepare, the smoother your homebuying journey will be!
Ready to get started? Click below to book a free consultation with us and see how we can assist you in your home-buying journey
