Finance
Private Mortgage Insurance (PMI) is typically required when:
AA. The property is located in a high-risk area
BB. The borrower's down payment is less than 20% of the purchase price✓ Correct
CC. The loan amount exceeds $500,000
DD. The borrower has a credit score below 700
Explanation
PMI protects the lender (not the borrower) when the borrower puts less than 20% down. It allows buyers with smaller down payments to obtain financing while the lender's risk exposure is mitigated.
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