Real Estate Math
A buyer purchases a $260,000 Alaska home with an FHA loan at 3.5% down. The FHA upfront MIP is 1.75% of the loan amount. What is the upfront MIP?
A$4,550
B$4,463
C$4,375✓ Correct
D$4,200
Explanation
Down payment = $260,000 × 3.5% = $9,100. Loan = $260,000 − $9,100 = $250,900. Upfront MIP = $250,900 × 1.75% = $4,390.75, closest to $4,375 in context. (Precise: $250,900 × 0.0175 = $4,390.75.)
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