Suppose You Have Obtained a 6%, 30 Year Fully-Amortizing FHA

Multiple Choice

Suppose you have obtained a 6%, 30 year fully-amortizing FHA mortgage loan of $152,625 to finance the purchase of your primary residence. In so doing, you must pay an additional mortgage insurance premium (MIP) of 1.10%. If the first-year average loan balance is $151,775.25, determine the first-year monthly insurance premium payment.

A) $139.13
B) $1,025.69
C) $1,669.53
D) $1,678.88