Question

: Typically required on ________ loans when the down payment is less than ______% and loan-to-value ratio is in excess of ____%. Loans with higher LTVs don't conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.

Answer 1

Answer:

Mortgage, 20%, 80%

Explanation:

Typically required on Mortgage loans when the down payment is less than 20% and loan-to-value ratio is in excess of 80%. Loans with higher LTVs don't conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.