All of the following are common characteristics of an FHA-insured purchase loan EXCEPT:
Correct Answer
C) It eliminates both upfront and ongoing mortgage insurance charges
Option B is the exception because FHA loans commonly involve mortgage insurance rather than eliminating it. FHA financing typically includes an upfront mortgage insurance premium and ongoing mortgage-insurance costs under current program structure.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
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