Finance
When a lender requires a borrower to pay private mortgage insurance (PMI), it is typically because the borrower's loan-to-value (LTV) ratio is:
ABelow 80%
BAt exactly 80%
CAbove 80%✓ Correct
DAbove 95%
Explanation
PMI is typically required on conventional loans when the LTV ratio exceeds 80% (i.e., the down payment is less than 20%). PMI protects the lender in case of borrower default.
Related Arizona Finance Questions
- A 'purchase money mortgage' in Arizona is significant for anti-deficiency purposes because:
- What does LTV stand for in mortgage lending?
- Arizona's anti-deficiency statute (A.R.S. § 33-729) generally prohibits a lender from obtaining a deficiency judgment after a trustee's sale (non-judicial foreclosure) on:
- Under RESPA (Real Estate Settlement Procedures Act), a lender must provide the buyer with a Loan Estimate within:
- A conventional conforming loan in Arizona must meet the underwriting guidelines of:
- What is amortization in mortgage lending?
- An FHA loan in Arizona requires a minimum down payment of:
- A buyer in Arizona is obtaining an FHA loan. The minimum down payment required is:
Practice More Arizona Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →