Finance
Under the Homeowners Protection Act, conventional PMI must be automatically canceled by the lender when the principal balance reaches:
A90% LTV
B78% of the original purchase price or appraised value (whichever is lower) based on the original amortization schedule✓ Correct
C80% LTV based on current market value
D75% LTV
Explanation
The Homeowners Protection Act (HPA) requires automatic PMI cancellation when the outstanding principal balance reaches 78% of the original purchase price or appraised value (the lower of the two), based on the original amortization schedule. Borrowers may request cancellation at 80% LTV with a good payment history.
Related Texas Finance Questions
- A Texas 'blanket mortgage' is used primarily in:
- Under Texas law, the foreclosure deed (trustee's deed) conveys title to the highest bidder at the foreclosure sale. The title conveyed is:
- A Texas borrower obtains an FHA loan with a 3.5% down payment. The purchase price is $280,000. What is the loan amount?
- 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 property owner refinancing their mortgage pays off their existing $250,000 balance and gets a new $280,000 mortgage. The $30,000 difference is:
- A VA loan in Texas guarantees a portion of the loan for eligible veterans. This guarantee eliminates the need for:
- A Texas lender offers a 5/1 ARM with a 2/2/5 cap structure. This means the rate can increase by how much at the first adjustment?
- The Texas Bootstrap Loan Program provides:
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →