Finance
Private Mortgage Insurance (PMI) is typically required when a conventional loan has an LTV ratio above:
A70%
B75%
C80%✓ Correct
D90%
Explanation
PMI is typically required on conventional loans when the loan-to-value ratio exceeds 80%, meaning the borrower put down less than 20%. PMI protects the lender if the borrower defaults.
Related Illinois Finance Questions
- What is a 'conforming loan' in Illinois mortgage financing?
- When a borrower 'locks in' a mortgage interest rate, this means:
- An adjustable-rate mortgage (ARM) with a '5/1' structure means:
- A 'subordination agreement' in real estate financing allows:
- What is the primary purpose of Private Mortgage Insurance (PMI) in Illinois real estate transactions?
- A buyer is purchasing a home for $310,000 with a 10% down payment. The seller has agreed to pay 3% of the purchase price toward the buyer's closing costs. The buyer's total cash needed at closing (down payment + remaining closing costs above seller's contribution), assuming total closing costs of 4%:
- A construction loan differs from a standard mortgage because:
- A mortgage that requires the borrower to pay interest only for a set period, after which they must pay off the full principal balance, is called a:
Practice More Illinois Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Illinois Quiz →