Finance
In South Dakota, 'private mortgage insurance' (PMI) on a conventional loan is typically required when:
AThe borrower has a credit score below 700
BThe loan-to-value ratio exceeds 80% (down payment less than 20%)✓ Correct
CThe property is in a rural area
DThe loan term exceeds 20 years
Explanation
Private mortgage insurance (PMI) is required on conventional loans when the LTV exceeds 80% (i.e., the down payment is less than 20%). PMI protects the lender against default risk and can be cancelled once the borrower reaches 20% equity.
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