Finance
What is the main purpose of private mortgage insurance (PMI) in a Tennessee real estate transaction?
ATo insure the borrower's life in case of death
BTo protect the lender if the borrower defaults on a low-down-payment loan✓ Correct
CTo insure the property against physical damage
DTo guarantee the title is clear
Explanation
PMI protects the lender (not the borrower) against loss if the borrower defaults and the home value is insufficient to cover the loan balance. It is typically required when the LTV exceeds 80%.
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