Finance
What does LTV stand for in mortgage lending, and why does it matter?
ALoan Transfer Value — determines how quickly a loan can be sold on the secondary market
BLoan-to-Value ratio — compares the loan amount to the property's appraised value and affects interest rates and PMI requirements✓ Correct
CLender's Total Valuation — the lender's estimate of the borrower's net worth
DLong-Term Value — a 30-year projection of property appreciation
Explanation
LTV (Loan-to-Value) ratio is the loan amount divided by the property's appraised value, expressed as a percentage. A higher LTV means more risk for the lender and often results in higher interest rates and a requirement for private mortgage insurance (PMI).
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