Finance
A Texas borrower with a 680 FICO score qualifies for a conventional loan at 5% down but will pay a higher PMI premium than a borrower with a 780 score. This difference reflects:
ATREC's rate-setting authority
BRisk-based pricing where lower credit scores indicate higher default risk and thus higher insurance costs✓ Correct
CA government mandate to protect lower-credit borrowers
DAn unfair practice prohibited by ECOA
Explanation
PMI premiums are risk-based. Borrowers with lower credit scores present a statistically higher default risk, so PMI companies charge them higher premiums. This is a standard underwriting practice, not a fair lending violation.
Related Texas Finance Questions
- A Texas property owner transfers their home to their adult child using a deed while still retaining a life estate. The parent's estate plan benefit is that:
- In Texas, a home equity line of credit (HELOC) secured by the homestead can be used for:
- An amortizing Texas mortgage loan has a fixed payment. Over time, the portion of each payment going to interest:
- A Texas borrower applies for a $500,000 mortgage in 2024. This loan likely exceeds the conforming loan limit and would be classified as:
- A Texas seller who carries back a second lien to help a buyer complete a transaction should understand that their second lien is:
- A Texas borrower receives a Loan Estimate (LE) within 3 business days of applying for a mortgage. The LE must include:
- In Texas, a 'hard money' loan is characterized by:
- A Texas commercial borrower's lender requires personal guaranty. This means:
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →