Finance
The loan-to-value (LTV) ratio is calculated by:
ADividing the purchase price by the loan amount
BDividing the loan amount by the appraised value of the property✓ Correct
CDividing the down payment by the loan amount
DMultiplying the interest rate by the loan balance
Explanation
LTV = Loan Amount ÷ Appraised Value (or Purchase Price, whichever is lower). For example, a $180,000 loan on a $200,000 property equals a 90% LTV ratio.
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