California Real Estate Practice Exam 2026 – 400 Free Practice Questions to Pass the Exam

A) When he has paid off $26,000 This option is incorrect because PMI (Private Mortgage Insurance) is typically required when a buyer does not have a down payment of 20% or more. So, in this scenario, the buyer has 100% financing and therefore will be required to pay PMI.

B) When the property value increases: This option is incorrect because PMI is based on the original purchase price of the property, not the value of the property over time.

D) After 5 years of payments: This option is incorrect because the length of time for paying PMI can vary and is not necessarily tied to a specific number of years. It is based on the remaining balance on the loan and when the buyer reaches a certain loan-to-value ratio. In this scenario, it is when the buyer has paid off $65,000, or 25% of the original purchase price.