A borrower is seeking an FHA-insured loan. He will put the minimum 3.5% down payment and pay the upfront mortgage insurance fee of 1.75%. He will pay the annual mortgage insurance fee of .85% for the life of the loan. His interest rate is 5%, the APOR (as of the date the loan interest rate is locked) is 4.672%, and his APR for this loan is 6.474%. Is this a High cost mortgage loan or a Higher priced mortgage loan or both?

A borrower is seeking an FHA-insured loan. He will put the minimum 3.5% down payment and pay the upfront mortgage insurance fee of 1.75%. He will pay the annual mortgage insurance fee of .85% for the life of the loan. His interest rate is 5%, the APOR (as of the date the loan interest rate is locked) is 4.672%, and his APR for this loan is 6.474%. Is this a High cost mortgage loan or a Higher priced mortgage loan or both?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

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