Real Estate Math
A buyer makes a $75,000 down payment on a $375,000 home. What is the loan-to-value (LTV) ratio?
A20%
B80%✓ Correct
C25%
D75%
Explanation
Loan amount = $375,000 – $75,000 = $300,000. LTV = Loan ÷ Purchase Price = $300,000 ÷ $375,000 = 0.80 = 80%. A $75,000 down payment on a $375,000 home represents a 20% down payment, resulting in an 80% LTV.
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