What does LTV stand for and what does it measure?
Why Loan To Value — the ratio of the loan amount to the property's value Is Correct
Answer A: Loan To Value — the ratio of the loan amount to the property's value
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related California Questions
- A buyer's loan-to-value ratio (LTV) is 80% on a $600,000 purchase. What is the down payment amount?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?Real Estate Math
- A property is appraised at $320,000. The buyer makes a 20% down payment. What is the loan amount?Real Estate Math
- A buyer puts 20% down on a $500,000 home. What is the loan amount?Real Estate Math
- A property appraises at $500,000 and the buyer makes a 10% down payment. What is the loan-to-value (LTV) ratio?Finance
- What is the loan-to-value (LTV) ratio if a buyer purchases a $400,000 home with a $60,000 down payment?Finance
- Which loan program is specifically designed for veterans and active-duty military and requires no down payment?Finance
- The loan-to-value (LTV) ratio is calculated as:Finance
Key Terms to Know
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →