Finance
A Mississippi borrower obtains an FHA loan with a 3.5% down payment on a $200,000 purchase. The upfront mortgage insurance premium (UFMIP) for an FHA loan is:
APaid only at closing in cash
B1.75% of the base loan amount and can be financed into the loan✓ Correct
C0.85% annually divided into monthly payments
DA flat $1,500 fee
Explanation
FHA charges an upfront mortgage insurance premium (UFMIP) of 1.75% of the base loan amount. On a $200,000 purchase with 3.5% down, the loan is $193,000; UFMIP = $193,000 × 0.0175 = $3,377.50. The UFMIP can be financed into the loan rather than paid in cash at closing.
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