FinancingGovernment_backed_loansMEDIUM
A buyer purchases a $250,000 home with an FHA loan and the minimum 3.5 percent down payment. The upfront mortgage insurance premium (UFMIP) is 1.75 percent of the loan amount and is financed into the loan. What is the total initial loan balance including the UFMIP?
Correct Answer
B) $245,469
Down payment = $250,000 × 3.5% = $8,750. Base loan = $250,000 - $8,750 = $241,250. UFMIP = $241,250 × 1.75% = $4,221.88 ≈ $4,219. Total loan = $241,250 + $4,219 = $245,469 (rounded).
Answer Options
A
$241,250B
$245,469C
$254,375D
$250,000Why This Is the Correct Answer
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Related Topics & Key Terms
Key Terms:
FHA_loanUFMIPcalculationmortgage_insurancefinancing
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