Finance
A Michigan buyer is purchasing a $350,000 home with 5% down. The FHA mortgage insurance premium (MIP) is 1.75% of the loan amount upfront. What is the upfront MIP?
A$5,819✓ Correct
B$6,125
C$7,000
D$5,250
Explanation
Down payment = $350,000 × 5% = $17,500. Loan = $350,000 − $17,500 = $332,500. Upfront MIP = $332,500 × 1.75% = $332,500 × 0.0175 = $5,818.75.
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