What is the typical loan-to-value (LTV) ratio requirement for a conventional conforming loan to avoid private mortgage insurance (PMI)?
Correct Answer
C) 80% or less
Conventional conforming loans typically require an LTV ratio of 80% or less to avoid PMI. This means the borrower must make a down payment of at least 20% of the home's purchase price or appraised value, whichever is less.
Why This Is the Correct Answer
Conventional conforming loans typically require an LTV ratio of 80% or less to avoid PMI. This means the borrower must make a down payment of at least 20% of the home's purchase price or appraised value, whichever is less.
More Mortgage Knowledge Questions
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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