Balance your down payment, PMI and cash cushion: test your skills
Less than 20% down usually means private mortgage insurance on a conventional loan — and it can be removed later. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Know when PMI applies
- Know the 80% and 78% removal points
- Balance down payment against cash reserves
- Practice
1. PMI is usually required when the down payment is below…
- Practice
2. You can ask to cancel PMI when the balance is scheduled to reach…
- Practice
3. PMI protects…
- Key idea
4. Which statement best explains "PMI protects the lender"?
- Key idea
5. Which statement best explains "It can end"?
- Key idea
6. Which statement best explains "Do not empty savings"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
Original home value $280,000. At what balance can you request PMI cancellation, and when does it end automatically?
Show the answer
$224,000 request; $218,400 automatic
$280,000 × 0.80 = $224,000. × 0.78 = $218,400.
If you have PMI, find the balance that equals 80% of your home’s original value.
More tests in this bootcamp
- Compare renting and buying with the full costs
- Check home affordability with the 28/36 guideline
- Balance your down payment, PMI and cash cushion
- Count closing costs before you buy a home
- Build a home repair reserve before something breaks
- Explore shared housing costs and landlord responsibilities
- Understand REITs: property exposure through investments
- Final exam: Housing and real estate