Finance
Private mortgage insurance (PMI) is typically required when a conventional loan has an LTV ratio greater than:
A70%
B75%
C80%✓ Correct
D90%
Explanation
PMI is generally required on conventional loans with an LTV above 80% (meaning the down payment is less than 20%). PMI protects the lender if the borrower defaults.
People Also Study
Related Nebraska Questions
- A borrower with a conventional loan and less than 20% down payment can request cancellation of PMI when:Finance
- Mortgage insurance premium (MIP) on an FHA loan differs from PMI on a conventional loan in that MIP:Finance
- A Nebraska lender is required to provide a Loan Estimate to a borrower within how many business days of receiving a completed loan application?Finance
- A Nebraska buyer's offer of $285,000 is accepted. The lender requires a 25% down payment. The buyer also pays 1.5 points on the loan amount. What is the total cash needed for down payment and points?Real Estate Math
- A Nebraska borrower who is behind on their mortgage and has received a notice of default has how long, generally, to reinstate the loan before foreclosure proceedings advance?Finance
- A Nebraska homeowner has a $220,000 mortgage. Their credit score qualifies them for a refinance at 6.25% (down from 7%). Monthly P&I on the old loan (7%, 25 years remaining) is $1,555. New monthly payment at 6.25% on $220,000 for 25 years would be approximately $1,497. Monthly savings are:Real Estate Math
- A buyer purchases a home for $320,000 with a 10% down payment. What is the loan amount?Real Estate Math
- In Nebraska, a lender's (mortgagee's) title insurance policy protects:Escrow & Title
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 Nebraska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nebraska Quiz →