Real Estate Math
A buyer pays $285,000 for a property assessed at $250,000. What is the LTV ratio if the buyer takes out a loan for $228,000?
A80%
B91.2%✓ Correct
C80%
D91.2%
Explanation
LTV = Loan Amount ÷ Purchase Price (or appraised value, whichever is lower). LTV = $228,000 ÷ $250,000 = 91.2%. Lenders use the lesser of appraised value or purchase price.
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