Suppose you are interested in taking a mortgage loan for $250,000 in order to purchase your principal residence.

Suppose you are interested in taking a mortgage loan for $250,000 in order to purchase your principal residence. Your lender has suggested that you might be interested in taking an FHA loan. In order to do so, you must pay an additional up-front mortgage insurance premium (UFMIP) of 1.0% of the mortgage balance. If the interest rate on the fully-amortizing mortgage loan is 5% and the term is 30 years, what is your monthly mortgage payment assuming the UFMIP is financed?

A. $1,342.05

B. $1,355.47

C. $1,498.88

D. $2,500

Expert Solution

House price	250000.00
up-front mortgage insurance premium @1%	2500.00
Total Martgage loan	252500.00
Annual interest rate	5.00%
Monthly rate	0.42%
TERM( YEAR)	30
Payments per year	12
total periods	360
Martgage loan amount	252500.00
Monthly payment	($1,355.47)	=PMT(0.42%,360,252500,,0)'
Using payment formula in excel

jeff jeffy answered 2 years ago

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