If the premium was .94% on a $150,000 loan, what is the monthly cost of PMI?

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Prepare for the NMLS Laws and Regulations Test with multiple choice questions and detailed explanations. Enhance your understanding and get ready to ace your exam with confidence!

Multiple Choice

If the premium was .94% on a $150,000 loan, what is the monthly cost of PMI?

Explanation:
PMI is charged as an annual rate on the loan amount, then divided into 12 monthly payments. With a 0.94% annual rate on a $150,000 loan: the annual premium is 150,000 × 0.0094 = 1,410. Divide by 12 to get the monthly cost: 1,410 ÷ 12 = 117.50. So the monthly PMI is $117.50.

PMI is charged as an annual rate on the loan amount, then divided into 12 monthly payments. With a 0.94% annual rate on a $150,000 loan: the annual premium is 150,000 × 0.0094 = 1,410. Divide by 12 to get the monthly cost: 1,410 ÷ 12 = 117.50. So the monthly PMI is $117.50.

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