Which of the following is NOT included in FHA monthly loan payments?

The correct answer highlights that pre-paid loan interest is not included in the FHA monthly loan payments. FHA loans typically involve monthly payments that consist of loan principal, mortgage insurance premiums, property taxes, and property insurance.

In the context of mortgage payments, the principal is the original amount of money borrowed to purchase the home, and this portion is paid down over the loan term. Pre-paid property taxes and pre-paid property insurance are amounts set aside in an escrow account to cover these costs when they become due, ensuring that the homeowner is protected and complies with tax obligations.

However, pre-paid loan interest refers to interest that has accrued before the first payment is due. This is typically paid up front, usually at closing, rather than being a part of the monthly payment structure. Monthly payments are structured to cover the ongoing costs that accumulate each month rather than pay ahead on interest, making it distinct from the other components that are included in FHA loan payments.