Private Mortgage Insurance (PMI) is typically required when:
Correct Answer
B) The down payment is less than 20%
PMI protects the lender against default and is typically required when the down payment is less than 20% (LTV greater than 80%). Once equity reaches 20%, PMI can usually be removed.
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Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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