Finance
The loan-to-value (LTV) ratio is calculated as:
APurchase price divided by loan amount
BLoan amount divided by appraised value (or purchase price, whichever is lower)✓ Correct
CDown payment divided by purchase price
DMonthly payment divided by gross monthly income
Explanation
LTV = Loan Amount ÷ Appraised Value (or purchase price, whichever is lower). A higher LTV means less equity and more risk for the lender, often requiring private mortgage insurance (PMI).
Related Arkansas Finance Questions
- Mortgage insurance on FHA loans is called:
- Which federal agency regulates banks that are members of the Federal Reserve System?
- Which of the following best describes a bridge loan?
- RESPA (Real Estate Settlement Procedures Act) primarily regulates:
- Fannie Mae (FNMA) is best described as:
- A mortgage that requires only interest payments for an initial period, after which the full principal becomes due, is known as a:
- A seller 'takes back' a purchase money mortgage from the buyer. This means the seller:
- Private Mortgage Insurance (PMI) is typically required when:
Practice More Arkansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arkansas Quiz →