Suppose you are interested in taking an FHA mortgage loan for $350,000 in order to purchase your principal residence. In order to do so, you must pay an additio
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Question
Suppose you are interested in taking an FHA mortgage loan for $350,000 in order to purchase your principal residence. In order to do so, you must pay an additional upfront mortgage insurance premium (UFMIP) of 1.0% of the mortgage balance. If the interest rate on the fully amortizing mortgage loan is 6% and the term is 30 years and the UFMIP is financed (i.e., it is included in the loan amount), what is the dollar portion of your monthly mortgage payment that is designated to cover the UFMIP
1 Answer

1. User Answers codiepienagoya
Answer:
The answer is "$20.98 ".
Explanation:
[tex]Loan \ Amount =  350,000\\\\UFMIP (1\%) =  3500\\\\Total \ Loan \ Amount =  353,500\\\\\frac{I}{y} =\frac{6\%}{12} = 0.5 \\\\N = 30\times 12 = 360\\\\PV= 353500\\\\ CPT \ PMT = \$2,119.41 \\\\[/tex]
Suppose
[tex]Loan = 100\\\\UFMIP = 1\\\\Loan\ \ Amount = 101\\\\Proportionate\ \ UFMIP = 2119.41 \times ( \frac{1}{101})= 20.98[/tex]