Finance
Loan-to-value (LTV) ratio is calculated as:
APurchase price divided by appraised value
BLoan amount divided by appraised value✓ Correct
CMonthly payment divided by income
DDown payment divided by loan amount
Explanation
LTV = Loan Amount ÷ Appraised Value. Lenders use LTV to assess risk; higher LTV means the borrower has less equity and the lender bears more risk.
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