Duane Buziak works as a mortgage broker, which means one FHA application can be priced across many wholesale lenders. This guide shows you how to negotiate mortgage fees on an FHA loan: which closing costs can move, which are fixed by rule, and how to get lower fees confirmed in writing before you lock. Before you start, gather a Loan Estimate from at least two brokers or lenders, plus your purchase contract (or your current loan details if you are refinancing). A pay stub or two and your ID will help if you need to start a new application.
Step 1: Get Loan Estimates From Multiple Sources on the Same Day
Fees and rates shift with the market, so quotes collected weeks apart tell you little. Request every Loan Estimate within a day or two of each other, and give each provider identical inputs: FHA loan type, term (for example 30 years), base loan amount, property address or ZIP code, and lock period (30,45, or 60 days).
Under CFPB rules, a lender or broker must deliver a Loan Estimate within three business days of receiving a complete application. Credit scoring models generally treat mortgage inquiries made within a short shopping window as a single inquiry, but the length of that window varies by scoring model. Confirm the current language at myfico.com or consumerfinance.gov before you rely on a specific day count.
It also helps to know who you are asking. A retail lender prices from its own single rate sheet. A broker is licensed to arrange the loan and can submit it to multiple wholesale lenders, so one application can produce several fee structures. Duane Buziak works as a broker with access to hundreds of wholesale lenders, and the Dare to Compare pricing challenge invites you to put his quote next to any other. NoTouch Credit Pull (a soft pull, no hard inquiry) lets him pre-qualify you without adding a hard inquiry to your report. Terms at other companies vary, so ask each one what kind of pull they use and when.
Large national retail lenders such as Rocket and Movement can be useful quotes to collect. They give you a second and third data point for leverage, and you do not need to assume anything about their fees in advance. Let the Loan Estimate tell you.
Mistake to avoid: comparing rates only. A low rate can come with high origination charges. When the documents arrive, look at Section A (origination charges) and the total closing costs on page 2, not just the rate on page 1.
Step 2: Sort Fees Into Fixed, Shoppable, and Negotiable
Not every line on a Loan Estimate is open to discussion. Sorting them first keeps you from wasting leverage on charges nobody can change.
Fixed fees
The FHA upfront mortgage insurance premium (UFMIP) is 1.75% of the base loan amount, set by HUD (Mortgagee Letter 2015-01; verify the current figure at hud.gov). Annual MIP is also set by HUD and varies by loan term, loan-to-value, and loan amount. Recording fees and transfer taxes are set by the locality. None of these are bargaining chips.
A common misconception is that UFMIP can be bargained down. It cannot, but you can choose to finance it into the loan, which reduces cash to close while raising the balance.
Negotiable fees
These are controlled by the broker or lender: origination or processing fee, underwriting fee, application fee, document preparation fee, and similar charges.
Shoppable fees
Title insurance, the settlement or closing agent, survey, and pest inspection can usually be chosen by you, either from the provider list on your Loan Estimate or from your own search.
Where to look on page 2
- Section A: origination charges (negotiable).
- Section B: services you cannot shop for, such as the appraisal and credit report.
- Section C: services you can shop for.
- Section E: taxes and government fees (fixed).
- Section F: prepaids such as homeowners insurance and prepaid interest.
UFMIP typically appears in Section B when it is charged at closing or is reflected in the loan amount when financed. Ask your loan officer to point to it so you know exactly what you are looking at.
Step 3: Compare Your Quotes Line by Line
Build a simple grid with one column per quote and these rows: origination charges, discount points or lender credits (in dollars), services you cannot shop for, services you can shop for, and estimated cash to close. The CFPB’s Loan Estimate explainer walks through each section if you need a reference while filling it in.
Convert points and credits to dollars. A quote showing a lower rate may include discount points that you pay up front, while another quote may offer a lender credit at a slightly higher rate. A rate with points is not comparable to a no-points quote until both are expressed as cost.
Worked example (hypothetical numbers): suppose your base FHA loan is $300,000. UFMIP at 1.75% is $5,250 on every quote, because HUD sets it. That means any difference in total cost between offers comes from the other lines. If Quote A shows $2,400 in Section A and Quote B shows $1,100 in Section A with a $900 lender credit, you can see at a glance that B is cheaper in origination terms, and you can then check whether the rate difference justifies the gap.
Mark these as negotiation targets:
- Any fee that appears on one quote but not on another.
- Any vaguely labeled charge, such as “administration” or “processing,” with no explanation of what it pays for.
- Any Section A total noticeably higher than your other quotes.
Keep the grid. In the next step it becomes your script.
Step 4: Ask for Specific Reductions, in Writing
Vague requests get vague answers. Name the fee, name the number, and name the competing quote. For example: “Your Section A shows a $1,295 processing fee. Another quote I hold shows $495 for the same loan. Can you reduce or waive it?” That is far stronger than “I found it cheaper elsewhere.”
Ask in this order:
- Ask what each questionable fee pays for, then ask to remove junk or duplicate charges.
- Ask to reduce origination or underwriting charges to match the competing quote.
- If the fees will not move, ask for a lender credit, which usually comes with a slightly higher rate.
Ask for the revised Loan Estimate by email. A verbal promise does not bind anyone at closing; a dated, written document does. A broker’s compensation must be disclosed on the Loan Estimate and cannot be changed later except for a valid changed circumstance, such as a change in loan amount or a borrower-requested change. That is why the written revision matters: it fixes the numbers you negotiated.
Asking for a competing quote comparison will not hurt your approval. Pricing conversations are ordinary, and approval turns on your credit, income, assets, and the property.
Mistakes to avoid: negotiating only the rate while ignoring fees, or demanding that every fee be waived. A short, specific, reasonable list shows you have done your homework and keeps the conversation productive.
Step 5: Use Seller Concessions and Credits Within FHA Limits
If you are buying, the seller can help with costs. FHA permits seller contributions toward closing costs of up to 6% of the sales price (HUD Handbook 4000.1; confirm the current wording and as-of date at hud.gov). Put the request in the purchase offer, not after the inspection. Concessions cannot exceed your actual allowable closing costs and prepaids, and they cannot be applied to the down payment.
There is a tradeoff. In a competitive market, asking for a credit can weaken your offer, or you may need to offer a higher price to make the numbers work for the seller. The appraisal still has to support the price, so a higher offer is not free. Discuss the approach with your agent and loan officer before you write the offer.
Lender credits are the other tool. By accepting a slightly higher rate, you can receive a credit that offsets closing costs. Combined with a seller concession, this can create no-out-of-pocket closing options for some borrowers. The result depends on your price, rate, and costs, so it is never guaranteed, and you should have it calculated on a real Loan Estimate.
To confirm how credits are applied, look at Section J (Total Closing Costs) on page 2 of the Loan Estimate, where lender credits are shown as a reduction. Seller credits appear later, on the Closing Disclosure, in the Calculating Cash to Close section and the seller-paid columns. Check that the amount matches your contract.
Step 6: Lock the Deal and Check the Closing Disclosure Against the Loan Estimate
Before you lock, confirm that the final Loan Estimate shows the fees you negotiated. Then get written lock confirmation that states the rate, any points or credits, and the lock period. If your closing date could slip, ask what an extension would cost.
The Closing Disclosure must reach you at least three business days before closing under CFPB rules. Compare it to your final Loan Estimate line by line, starting with Section A and the cash to close total.
Know the tolerance rules, which limit how much costs can change (verify the current rule at consumerfinance.gov):
- Zero tolerance: lender and broker origination charges, and fees for services where the lender or broker picked the provider with no room to shop, cannot increase without a valid changed circumstance.
- 10% aggregate tolerance: certain third-party fees, such as recording fees and services you shopped for from the lender’s list, can rise by a combined 10%.
- No tolerance limit: items such as prepaid interest, insurance premiums, and services you chose from outside the lender’s list can change.
If a fee rose beyond what the rules allow, ask in writing for a corrected disclosure and a cure, meaning a refund or credit for the excess. If the increase is on an item you selected yourself, it may be permitted, so ask the loan officer to explain the reason.
If you already hold a Loan Estimate, Duane Buziak can review it and explain which lines have room to move before you commit.
Take Your Negotiated Estimate to the Closing Table
Once you receive the final Closing Disclosure, recheck it against the Loan Estimate you negotiated. Every line you pushed on in Section A should match, and any credit should appear where it was promised. If something is off, raise it before closing day, not at the table.
If you do not yet have a quote to work from, or you want a second opinion on one, Duane Buziak will review your FHA Loan Estimate before you lock. As a broker with hundreds of wholesale lenders, he can price your loan against the market, and NoTouch Credit Pull means a soft pull with no hard inquiry to start. Dare to Compare is an open invitation to bring any other quote and see whether it can be beaten.
Ready to take the first step toward homeownership with an FHA loan tailored to your needs? Schedule your free consultation today and discover how our award-winning team can help you navigate the path to your new home with competitive rates and expert guidance. Call 804-212-8663 or visit 4860 Cox Rd, Glen Allen, VA 23060. FHA Mortgages by Duane Buziak is a broker operating through Coast2Coast Mortgage LLC, NMLS #1110647, licensed in FL, GA, KY, MD, NC, SC, TN, TX, VA, WV, and DC.
