Finance
Loan-to-value ratio (LTV) measures:
AThe ratio of loan payments to borrower income
BThe ratio of the loan amount to the appraised value of the property✓ Correct
CThe ratio of interest to principal
DThe ratio of down payment to purchase price
Explanation
LTV = Loan Amount ÷ Appraised Value (or purchase price, whichever is lower). A higher LTV represents more lender risk, often requiring PMI for conventional loans above 80% LTV.
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