Finance
What is 'private mortgage insurance' (PMI) and when can an Idaho borrower request its cancellation?
AIt is mandatory for all loans and cannot be cancelled
BIt protects the lender and must be cancelled when the loan-to-value ratio reaches 80% under the Homeowners Protection Act✓ Correct
CIt is optional and the lender sets cancellation terms
DIt automatically cancels after 5 years
Explanation
Under the Homeowners Protection Act (HPA), PMI must be cancelled when the borrower's equity reaches 20% (LTV of 80%) based on the original purchase price through normal amortization. Lenders must automatically terminate it at 78% LTV.
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