A lender will usually require a loan-to-value ratio of _____ or less for a borrower to avoid having to pay private mortgage insurance (PMI).
A) 75%
B) 80%
C) 85%
D) 90%
E) 95%

Question

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A loan-to-value (LTV) ratio is the amount of the loan compared to the appraised value of the property. If the LTV ratio is higher than 80%, lenders typically require borrowers to pay for private mortgage insurance (PMI). Therefore, to avoid PMI, the LTV ratio should be 80% or lower. Choice B is the only option with an LTV ratio of 80% or lower.

A Lender Will Usually Require a Loan-To-Value Ratio of _____