Finance
What is the purpose of private mortgage insurance (PMI) in North Dakota conventional loans?
ATo protect the borrower if they lose their job
BTo protect the lender against losses if the borrower defaults when LTV exceeds 80%✓ Correct
CTo insure the property against casualty loss
DTo guarantee the property's appraised value
Explanation
PMI protects the lender (not the borrower) against losses if the borrower defaults. It is typically required on conventional loans with less than 20% down payment (LTV over 80%) and can be cancelled once the LTV reaches 80%.
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