medium · National Real Estate Exam financing

If the buyer makes a $38,000 down payment, will the lender likely require private mortgage insurance (PMI)?

1. Yes, because the loan-to-value ratio is based on the appraised value, resulting in an 80% ratio.
2. Yes, because the loan-to-value ratio exceeds 80% of the appraised value.
3. No, because private mortgage insurance is only required for government-backed loans like FHA.
4. No, because the down payment is exactly 20% of the purchase price.

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