CRAM ARCADE Open App

A borrower purchases a home for $500,000 and puts 15% down. What is the LTV ratio, and will PMI likely be required?

Loan Origination Activities · 27% of the SAFE exameasy

Show the answer and explanation

Correct answer: 85% LTV — yes, PMI is typically required

LTV = Loan Amount / Property Value. With 15% down: Loan = $500,000 × 85% = $425,000. LTV = $425,000 / $500,000 = 85%. PMI is typically required when LTV exceeds 80% on conventional loans.

Drill 2,078 more questions like this, free

CRAM ARCADE has the full NMLS question bank, timed practice exams, focus drills on your weakest category, flashcards and spaced repetition. No credit card.

Start studying free