What is the up-front mortgage insurance percentage on a full qualifying FHA loan?

What is the up-front mortgage insurance percentage on a full qualifying FHA loan?

• A. 1.25%
• B. 1.75%
• C. 2.00%
• D. 2.50%

Answer: (B)

The up-front mortgage insurance premium (UFMIP) for a full qualifying FHA loan is established at 1.75%. This fee is a vital part of the FHA loan program, intended to help protect lenders in case of borrower default. It applies to the entire loan amount and can be added to the mortgage balance, allowing borrowers to finance this cost instead of paying it out of pocket at closing. The UFMIP is a one-time payment, which can be a significant consideration for borrowers when determining their total closing costs. Having a lower UFMIP compared to other options in the market makes FHA loans an attractive choice for many first-time homebuyers and those with less-than-perfect credit, as these individuals may be more reliant on such government-backed loans to secure financing.

The up-front mortgage insurance premium (UFMIP) for a full qualifying FHA loan is established at 1.75%. This fee is a vital part of the FHA loan program, intended to help protect lenders in case of borrower default. It applies to the entire loan amount and can be added to the mortgage balance, allowing borrowers to finance this cost instead of paying it out of pocket at closing.

The UFMIP is a one-time payment, which can be a significant consideration for borrowers when determining their total closing costs. Having a lower UFMIP compared to other options in the market makes FHA loans an attractive choice for many first-time homebuyers and those with less-than-perfect credit, as these individuals may be more reliant on such government-backed loans to secure financing.