You have found a home that you are interested in purchasing. Instead of a conventional loan, you agree to pay the premium for the private mortgage insurance (PMI), which finances 95% of the loan. The amount of the home is listed at $95,278. From the given information, determine the amount needed for the down payment to qualify for the PMI loan.
The PMI loan finances 95% of the $95,278 home price, so the down payment is the remaining 5%. Calculate 0.05 × $95,278 = $4,763.90. Therefore, the down payment is $4,763.90, choice d.
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