Finance
A buyer in Alaska obtains a conventional loan with an LTV (loan-to-value) ratio of 90%. The lender will most likely require:
AA larger down payment
BPrivate mortgage insurance (PMI)✓ Correct
CA VA guarantee
DA co-signer on the note
Explanation
Conventional lenders typically require private mortgage insurance (PMI) when the LTV exceeds 80%. PMI protects the lender against default risk on high-LTV loans.
Related Alaska Finance Questions
- Which of the following best describes a 'short sale' in Alaska?
- Which of the following is an example of predatory lending that federal law prohibits?
- Under what circumstances would an Alaska homeowner most likely need to pay Private Mortgage Insurance (PMI)?
- A buyer in Alaska uses a 'piggyback loan' (80-10-10 financing) to avoid PMI. This means:
- An Alaska property has a purchase price of $550,000. The buyer puts 20% down and obtains a 30-year fixed mortgage at 6.75%. The loan-to-value ratio at origination is:
- The 'debt service coverage ratio' (DSCR) is used in commercial lending to ensure that:
- Under Regulation Z (Truth in Lending Act), lenders must provide the annual percentage rate (APR) because:
- An Alaska buyer is applying for a USDA Rural Development loan. One key eligibility requirement is that the property must be:
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