Private Mortgage Insurance (PMI) is typically required when the loan-to-value (LTV) ratio exceeds which threshold?
Correct Answer
B) 80%
PMI is typically required on conventional loans when the borrower's loan-to-value (LTV) ratio exceeds 80%, meaning the borrower has less than 20% equity or down payment. Under the Homeowners Protection Act, borrowers may request cancellation of PMI once the LTV reaches 80%, and lenders must automatically cancel it at 78% LTV based on the original amortization schedule.
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