Question: You are an analyst of the FHA program. The program has an upfront insurance premium of 1.75 percent and an annual premium of .85 percent.

You are an analyst of the FHA program. The program has an upfront insurance premium of 1.75 percent and an annual premium of .85 percent. If a borrower gets a 30-year, 4 percent, fixed-rate mortgage, and pays it off in 15 years, and also pays a point, what is the all-in cost of the mortgage to the borrower annually?

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To calculate the allin cost of the mortgage to the borrower annually we need to consider several components the original loan amount upfront insurance ... View full answer

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