Finance
An FHA loan requires borrowers to pay a Mortgage Insurance Premium (MIP). This insurance protects:
AThe borrower against job loss
BThe lender against borrower default✓ Correct
CThe title company against ownership disputes
DThe appraiser against valuation errors
Explanation
FHA MIP protects the lender — not the borrower — against losses if the borrower defaults. It allows lenders to offer loans with lower down payments (as low as 3.
Related Arkansas Finance Questions
- Arkansas uses which security instruments to secure a real estate loan?
- The purpose of the federal Homeowners Protection Act (HPA) is to:
- RESPA (Real Estate Settlement Procedures Act) primarily governs:
- Private Mortgage Insurance (PMI) is typically required when the buyer's down payment is less than:
- A conventional mortgage loan is one that:
- A USDA Rural Development loan is best described as:
- Arkansas is a 'lien theory' state. This means that when a borrower takes out a mortgage:
- The secondary mortgage market involves:
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