Private mortgage insurance (PMI) on a conventional loan is required when the LTV exceeds:
Correct Answer
B) 80%
PMI is required on conventional loans when the loan-to-value ratio exceeds 80% (down payment less than 20%). PMI protects the lender, not the borrower, against default. It can be removed when the LTV drops to 78-80%.
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Related Topics & Key Terms
Related Topics:
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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