Finance
What is the purpose of private mortgage insurance (PMI) in a Hawaii residential purchase?
AA. Protects the buyer if the property loses value
BB. Protects the lender if the borrower defaults on a high-LTV loan✓ Correct
CC. Provides life insurance to pay off the mortgage if the borrower dies
DD. Insures the title against defects
Explanation
PMI protects the lender, not the borrower, against loss if the borrower defaults. It is typically required when the LTV exceeds 80%.
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