General Mortgage KnowledgeQuestion 97 of 400
A buyer purchases a home for $400,000 with a $80,000 down payment and a $320,000 loan. What is the loan-to-value (LTV) ratio?
a.80%
b.20%
c.25%
d.75%
Explanation
LTV = loan amount / value = $320,000 / $400,000 = 80%. The 20% figure is the down payment ratio, not the LTV. 25% and 75% do not match the loan divided by the purchase price.
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