Finance
A lender's loan-to-value (LTV) ratio is calculated by:
ADividing the property's appraised value by the loan amount
BDividing the loan amount by the appraised value of the property✓ Correct
CDividing the down payment by the purchase price
DDividing the monthly payment by the borrower's gross income
Explanation
LTV = Loan Amount ÷ Appraised Value (or Purchase Price, whichever is lower). A lower LTV represents less risk to the lender.
Related Connecticut Finance Questions
- A Connecticut buyer's loan falls through 2 days before closing due to a last-minute job loss discovered by the lender. The purchase contract has a financing contingency that has already been removed. What can the buyer do?
- A Connecticut borrower wants to pay off their 30-year mortgage in 20 years by making extra principal payments. The effect will be:
- A Connecticut lender approves a borrower for a mortgage. The 'commitment letter' provided to the borrower is:
- A Connecticut borrower is comparing a 15-year mortgage to a 30-year mortgage of the same amount. Which statement is TRUE?
- Under Connecticut's foreclosure process, after the law day passes in a strict foreclosure, what happens to the mortgagor's interest?
- Under Connecticut law, a 'mortgage' document contains all of the following EXCEPT:
- A Connecticut borrower receives a 30-year amortizing mortgage at 7% and makes extra principal payments each month. The effect is:
- What is the primary purpose of the federal Truth-in-Lending Act (TILA/Regulation Z) in Connecticut mortgage lending?
Practice More Connecticut Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Connecticut Quiz →