Finance
A conventional loan with a down payment of less than 20% typically requires:
AA co-signer on the loan
BPrivate mortgage insurance (PMI)✓ Correct
CA higher interest rate by law
DApproval from the FHA
Explanation
When a conventional loan has less than 20% down payment (LTV over 80%), lenders typically require private mortgage insurance (PMI) to protect against default risk. PMI can be canceled once the LTV reaches 80%.
Related Alabama Finance Questions
- A home equity line of credit (HELOC) is a form of:
- An impound (escrow) account maintained by a mortgage lender holds funds for:
- An FHA loan requires a minimum down payment of:
- A VA loan guarantee benefit is available to:
- The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against applicants based on:
- The CFPB regulates mortgage lending through which two key disclosure rules?
- Points on a mortgage loan are used to:
- An Alabama real estate agent advising a buyer on financing should know that the maximum conventional loan amount conforming to Fannie Mae and Freddie Mac limits is referred to as the:
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →