Finance
What is private mortgage insurance (PMI) and when is it typically required?
AInsurance protecting the buyer if the property is damaged; required on all loans
BInsurance protecting the lender if the borrower defaults; typically required when LTV exceeds 80%✓ Correct
CInsurance protecting the agent's commission; required on all sales
DTitle insurance for private sales; required when no escrow is used
Explanation
PMI protects the lender (not the buyer) against loss if the borrower defaults. It is typically required on conventional loans when the down payment is less than 20% (LTV > 80%). PMI can be cancelled once equity reaches 20%.
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