FinancingConventional LoansEASY
In a conventional loan, private mortgage insurance (PMI) is typically required when the down payment is less than:
Correct Answer
C) 20%
PMI is typically required on conventional loans when the borrower makes a down payment of less than 20% (loan-to-value ratio exceeds 80%). PMI protects the lender against loss in case of borrower default.
Answer Options
A
5%B
10%C
20%D
25%Why This Is the Correct Answer
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Related Topics & Key Terms
Related Topics:
LTVFHA-MIPconventional-loansHomeowners-Protection-Act
Key Terms:
PMI80% LTV20% down paymentlender protectionremovable
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