Final answer:
The FHA additional mortgage fee question deals with the tiered fee structure imposed on mortgages when base loan amounts exceed specific thresholds, increasing in percentage as the loan amounts go up.
Step-by-step explanation:
FHA Additional Fees for Exceeding Base Loan Amounts
The question pertains to the additional fees assessed on Federal Housing Administration (FHA) mortgages when the base loan amount exceeds certain thresholds. These fees are essentially financial penalties that increase in a tier-structured manner as the loan amount increases beyond set limits. This graduated fee structure is designed to manage risk and ensure the solvency of the FHA fund by requiring higher contributions from larger loan amounts.
For example, if someone takes out an FHA loan for $60,000, the additional fee is calculated by the first tier: $7,500 plus 25% of the amount over $50,000. Since $60,000 is $10,000 over $50,000, the additional fee would be $7,500 plus 25% of $10,000, which is $2,500, totaling an additional fee of $10,000.
As the base loan amount continues to climb, the additional fee percentage and base fee also increase as demonstrated by the various tiers provided in the question:
$7,500 + 25% of the amount over $50,000$13,750 + 34% of the amount over $75,000$22,250 + 39% of the amount over $100,000$113,900 + 34% of the amount over $335,000$3,400,000 + 35% of the amount over $10,000,000
These additional fees become significant as loan amounts increase, impacting the total cost of the mortgage for the borrower.