Finance
A buyer is obtaining a conventional loan with a 10% down payment on a $320,000 home. What is the minimum loan amount for which PMI would be required?
APMI is not required with 10% down
BPMI is required on the full $288,000 loan
CPMI is required because LTV exceeds 80%✓ Correct
DPMI is only required on FHA loans
Explanation
With 10% down ($32,000), the loan is $288,000, creating an LTV of 90% ($288,000/$320,000). Since LTV exceeds 80%, PMI is required on the conventional loan. PMI can be removed when LTV reaches 80% through principal paydown or appreciation.
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