In Ohio, when a borrower obtains a conventional loan with less than 20% down payment, the lender typically requires:
Correct Answer
B) Private mortgage insurance (PMI) to protect the lender against default
When the LTV exceeds 80% (less than 20% down), conventional lenders typically require private mortgage insurance (PMI). PMI protects the lender—not the borrower—against loss if the borrower defaults on the loan.
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Related Concepts
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
A comparison of the major mortgage loan types—conventional, FHA, VA, and USDA—covering their eligibility requirements, down payment amounts, mortgage insurance rules, and best use cases.
Predatory lending refers to unfair, deceptive, or abusive lending practices that impose unjustified terms on borrowers, often targeting vulnerable populations. It includes practices like excessive fees, inflated appraisals, and unnecessary refinancing.
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In Ohio, the conveyance fee is paid at the time of:
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An Ohio borrower is considering an adjustable-rate mortgage (ARM) with a 5/1 structure. This means the interest rate:
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An Ohio buyer obtains a 30-year fixed-rate mortgage. The lender establishes an escrow account for property taxes and homeowner's insurance. Under RESPA, the lender may maintain a cushion in the escrow account of no more than: