A Florida real estate licensee is helping a buyer understand loan-to-value ratios. The buyer asks about the maximum LTV typically allowed for conventional loans without private mortgage insurance (PMI). What should the licensee explain?
Correct Answer
B) Conventional loans typically require PMI above 80% LTV
Correct: Conventional loans typically require PMI when LTV exceeds 80%, protecting lenders from default risk. Option A incorrectly states 95% LTV without PMI. Option C is false as PMI is commonly required. Option D incorrectly suggests LTV doesn't affect PMI requirements.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
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