Finance
In New Mexico, 'private mortgage insurance' (PMI) is typically required when:
AThe loan is backed by FHA
BThe buyer's down payment is less than 20% on a conventional loan✓ Correct
CThe property is an investment property
DThe buyer has a credit score above 750
Explanation
PMI protects the lender against default on conventional loans with down payments less than 20% (LTV above 80%). PMI can be cancelled once the borrower reaches 20% equity in the property.
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