Finance
What does 'loan-to-value ratio' (LTV) represent in a Florida mortgage transaction?
AThe ratio of the loan amount to the appraised value or purchase price, whichever is lower✓ Correct
BThe ratio of monthly payments to monthly income
CThe ratio of the down payment to the annual interest rate
DThe ratio of closing costs to the purchase price
Explanation
LTV is the loan amount divided by the lesser of the appraised value or purchase price. For example, a $180,000 loan on a $200,000 property = 90% LTV. Higher LTV typically means more risk for the lender and may require PMI.
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