To determine the Up Front Mortgage Insurance Premium (UFMIP) amount for an FHA 30-year fixed-payment loan, we need to calculate the loan amount and then apply the UFMIP rate.
the Up Front Mortgage Insurance Premium (UFMIP) amount for the FHA 30-year fixed-payment loan would be $6,790.1. Calculate the Loan Amount:
Loan-to-Value (LTV) ratio = Loan amount / Purchase price
Given LTV = 97%, we can find the loan amount:
Loan amount = LTV * Purchase price
Loan amount = 0.97 * $400,000
Loan amount = $388,000
2. Calculate the UFMIP:
UFMIP rate = Loan amount * UFMIP percentage
Given UFMIP percentage = 1.75%, we can calculate the UFMIP amount:
UFMIP amount = Loan amount * UFMIP percentage
UFMIP amount = $388,000 * 0.0175
UFMIP amount = $6,790
Therefore, the Up Front Mortgage Insurance Premium (UFMIP) amount for the FHA 30-year fixed-payment loan would be $6,790.