Finance
Vermont buyers using an FHA loan must pay which type of insurance that protects the lender against default?
APrivate Mortgage Insurance (PMI)
BMortgage Insurance Premium (MIP) — both upfront and annual✓ Correct
CTitle insurance
DHomeowner's association insurance
Explanation
FHA loans require Mortgage Insurance Premiums (MIP): an upfront MIP paid at closing (or financed into the loan) and an annual MIP paid monthly. Unlike conventional PMI, FHA MIP typically remains for the life of the loan if the down payment is less than 10%, regardless of equity built.
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