Finance
Loan-to-value (LTV) ratio is calculated as:
APurchase price divided by loan amount
BLoan amount divided by appraised value (or purchase price, whichever is lower)✓ Correct
CAnnual income divided by loan amount
DMonthly payment divided by income
Explanation
LTV = Loan Amount ÷ Appraised Value (or purchase price if lower). A higher LTV indicates more risk to the lender. LTVs above 80% typically require PMI on conventional loans.
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