Finance
Private mortgage insurance (PMI) is typically required when the loan-to-value ratio exceeds:
A70%
B75%
C80%✓ Correct
D90%
Explanation
PMI is generally required when the LTV exceeds 80% (i.e.
People Also Study
Related Colorado Questions
- A Colorado buyer wants to qualify for a $320,000 mortgage. The lender requires a maximum front-end ratio of 28%. The monthly payment (PITI) is $2,100. What minimum monthly gross income is required?Real Estate Math
- In Colorado, 'private mortgage insurance' (PMI) can be cancelled by a borrower on a conventional loan when:Finance
- A property is purchased for $480,000 with a 25% down payment. What is the loan-to-value ratio (LTV)?Real Estate Math
- In Colorado, a mortgage lender is required to provide the borrower with a 'Loan Estimate' within how many business days of receiving the loan application?Finance
- A Colorado buyer obtains an FHA loan to purchase a $350,000 home. The FHA minimum down payment is 3.5%. What is the minimum down payment required?Finance
- A property in Colorado sells for $420,000. The buyer makes a 20% down payment and obtains a conventional mortgage. What is the loan amount?Finance
- A buyer's monthly principal and interest payment is $1,850. Annual property taxes are $3,600 and homeowners insurance is $1,200 annually. What is the total monthly PITI payment?Real Estate Math
- The 'E&O' (errors and omissions) insurance required by Colorado protects a broker against:Colorado License Law
Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
Study This Topic
Practice More Colorado Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →