Real Estate Math
A Virginia buyer makes a 3% down payment on a $380,000 home. PMI is 0.5% annually of the loan amount. What is the monthly PMI payment?
A$156.54
B$369080.00✓ Correct
C$140.25
D$159.00
Explanation
Down payment = $380,000 × 3% = $11,400. Loan = $380,000 – $11,400 = $368,600.
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Key Terms to Know
Private Mortgage Insurance (PMI)
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Math Concepts
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