Real Estate Math
An investor purchases a property for $525,000 with a 25% down payment and finances the remainder. What is the loan amount and the LTV ratio?
ALoan: $393,750 / LTV: 75%✓ Correct
BLoan: $131,250 / LTV: 25%
CLoan: $400,000 / LTV: 76%
DLoan: $262,500 / LTV: 50%
Explanation
Down payment = $525,000 × 25% = $131,250. Loan = $525,000 − $131,250 = $393,750. LTV = $393,750 ÷ $525,000 = 75%.
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