A homebuyer in NC is applying for an FHA loan. FHA mortgage insurance premium (MIP) differs from PMI in that MIP:
Why Requires an upfront premium plus an annual premium for the life of many loans Is Correct
Answer C: Requires an upfront premium plus an annual premium for the life of many loans
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related North Carolina Questions
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the down payment is less than:Finance
- What is the purpose of Private Mortgage Insurance (PMI) in a conventional loan?Finance
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the LTV exceeds:Finance
- A buyer secures a 30-year fixed mortgage on a $350,000 NC home with 10% down at 7% annual interest. The loan amount is:Real Estate Math
- A 'conventional loan' in NC refers to a mortgage that is:Finance
- An investor in NC buys an office building for $1,200,000 with a 25% down payment. The mortgage loan amount is:Real Estate Math
- A NC home is appraised at $350,000. The buyer obtains an 80% LTV conventional loan. The down payment and loan amount are:Real Estate Math
- A lender in NC refuses to make mortgage loans in predominantly minority neighborhoods regardless of individual applicants' creditworthiness. This practice is called:Fair Housing
Key Terms to Know
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Math Concepts
Study This Topic
Practice More North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →