According to regulations, how long must the annual mortgage insurance premium be paid before it can be canceled for loans with an LTV over 90%?

The correct answer is that the annual mortgage insurance premium must be paid for the entire term of the mortgage for loans with a loan-to-value (LTV) ratio over 90%. This is specified under the Federal Housing Administration (FHA) regulations, which dictate that for such loans, the mortgage insurance premium does not automatically cancel and will remain in place as long as the loan is outstanding.

For loans where the LTV is more than 90%, if a borrower had an FHA loan, they are usually required to continue paying mortgage insurance for the duration of the loan. This policy is intended to protect lenders from the risk associated with higher LTV loans, which often indicate higher potential for borrower default.

In contrast, the other options relate to different policies or thresholds not applicable to loans with LTV over 90%. Some options suggest periods such as 5 years or conditions like 78% LTV, but these do not pertain to the strict requirements regarding mortgage insurance for high LTV loans. Therefore, understanding that mortgage insurance continues throughout the loan term for certain LTV scenarios is crucial for compliance and effective financial planning within mortgage origination.