Private Mortgage Insurance (PMI) is typically required on conventional loans when the down payment is less than:
Why 20% Is Correct
Answer C: 20%
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
Key Finance Terms in This Question
People Also Study
Related North Carolina Questions
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the LTV exceeds:Finance
- What is the purpose of Private Mortgage Insurance (PMI) in a conventional loan?Finance
- A lender requires a maximum 80% LTV on a conventional loan. The appraised value is $350,000 and the purchase price is $340,000. What is the maximum loan amount?Real Estate Math
- A lender's title insurance policy (loan policy) in NC protects:Escrow & Title
- A NC borrower's 'debt-to-income ratio' for conventional mortgage qualification generally should not exceed approximately:Finance
- An investor in NC buys an office building for $1,200,000 with a 25% down payment. The mortgage loan amount is:Real Estate Math
- A NC lender charging a borrower a prepayment penalty on a residential mortgage is most restricted under:Finance
- In a NC purchase transaction, the buyer's lender typically requires 'lender's title insurance' to be paid by:Escrow & Title
Key Terms to Know
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 North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →