GRE Prep Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.
Customized
for You
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
To obtain an FHA mortgage for $50,000 or more, the home buyer must ha
[#permalink]
09 May 2021, 01:01
09 May 2021, 01:01
1
Expert Reply
2
Bookmarks
00:00
Question Stats:
57% (02:43) correct
42% (02:36) wrong based on 14 sessions
Hide Show timer Statistics
To obtain an FHA mortgage for $50,000 or more, the home buyer must have a down payment equal to 4 percent of the first $25,000 of the mortgage amount and 5 percent of the portion in excess of $25,000. At settlement the buyer pay a mortgage insurance premium equal to 3 percent of the mortgage amount. What is the maximum FHA mortgage, if any a buyer can obtain if the buyer has only $6,000 available for the down payment and insurance premium?
(A) $62,500
(B) $71,875
(C) $78,125
(D) $125,00
(E) The home buyer cannot obtain an FHA mortgage
(A) $62,500
(B) $71,875
(C) $78,125
(D) $125,00
(E) The home buyer cannot obtain an FHA mortgage
Re: To obtain an FHA mortgage for $50,000 or more, the home buyer must ha
[#permalink]
10 May 2021, 08:02
10 May 2021, 08:02
3
"4 percent of the first $25,000" = \(\frac{4}{100}\)*25000 = 1000
Hence, we are left with 5000.
Now, Let x be the mortgage amount. Then,
\(\frac{5}{100}\)*(x-25000) + \(\frac{3}{100}\)*x = 5000
On solving, we get
5x -125000+3x = 500000
8x=625000
x = 78125
Hence C.
Hence, we are left with 5000.
Now, Let x be the mortgage amount. Then,
\(\frac{5}{100}\)*(x-25000) + \(\frac{3}{100}\)*x = 5000
On solving, we get
5x -125000+3x = 500000
8x=625000
x = 78125
Hence C.
Re: To obtain an FHA mortgage for $50,000 or more, the home buyer must ha
[#permalink]
06 Sep 2024, 22:43
06 Sep 2024, 22:43
1
the first 4% is always on the first 25000
which will always be 10,000 for every amount-
if we take option C
the first 1000 (4% of 25000) + [ 78125 - 25000]x 5%
the excess of 25000 is the remaining amount after the first 25000 is taken out
so 1000 + 2,656.25 = 3656.25
on top of this the 3% premium on the total amount of 78125
total comes up to 6000
which will always be 10,000 for every amount-
if we take option C
the first 1000 (4% of 25000) + [ 78125 - 25000]x 5%
the excess of 25000 is the remaining amount after the first 25000 is taken out
so 1000 + 2,656.25 = 3656.25
on top of this the 3% premium on the total amount of 78125
total comes up to 6000
