hard · National Real Estate Exam financing
A borrower's original purchase-money loan had an LTV above 80%, so lender-required PMI was placed on the loan. Under the federal Homeowners Protection Act, the borrower has kept payments current.
At what point must the lender automatically terminate the PMI, absent any borrower request?
- At 80% of original value, on the lender's own initiative.
- At 78% of original value, automatically, no request needed.
- At 20% of current market value, if the borrower requests it.
- After five years of on-time payments, whatever the balance.
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