Q: We took out an FHA mortgage to finance our home. When we received the year end mortgage statement (1098), it contained an FHA disclosure for the payoff amount.

The payoff amount is about $3,000 more than the amount we borrowed! Is this an error?

Does it have something to do with the FHA insurance premium we had to pay at closing (approx $2,500)? Did our lawyer not tell us that there is some kind of recapture or prepayment penalty on FHA loans? Please let me know what you think.

A: It’s likely that this is the refund of your FHA premium. I’d call the lender and ask.

June 26, 2004.