Finance
A West Virginia FHA loan requires the borrower to pay:
ANo mortgage insurance
BAn upfront mortgage insurance premium (UFMIP) and annual MIP✓ Correct
CPMI only if the down payment is less than 10%
DA one-time lender insurance fee at closing
Explanation
FHA loans require both an upfront mortgage insurance premium (UFMIP) paid at closing and an annual mortgage insurance premium (MIP) included in monthly payments, regardless of the down payment amount.
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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.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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