FinanceQuestion 85 of 120
The loan-to-value (LTV) ratio is calculated as the:
a.Loan amount divided by the property's value or price
b.Property value divided by the loan amount
c.Interest rate multiplied by the term
d.Down payment divided by the interest rate
Explanation
LTV equals the loan amount divided by the lesser of the appraised value or sales price, expressed as a percentage. A lower LTV means more borrower equity and generally lower lender risk.
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