Clarence is purchasing a $142,000 home with a 15-year mortgage. He will
1 answer:
Answer:
prime mortgage insurance (PMI) is an insurance that mortgage lenders require when borrowers make a down payment of less than 20% of the purchase price of the house.
We are not given any table, so I looked in the internet to find one that can be used as an example:
outstanding principal = $142,000 - 17% = $117,860
- mortgage term equal or less than 15 years
- base loan amount is less than $625,000
- loan to value ratio = 1 - down payment = 83%, which means it is ≤ 90%
- bps = 45
total yearly premium = principal x bps = $117,860 x 0.0045 = $530.47
monthly PMI payment = $530.47 / 12 months = $44.20
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