Finance
The loan-to-value (LTV) ratio is calculated as:
APurchase price divided by annual income
BLoan amount divided by the appraised value (or purchase price, whichever is lower)✓ Correct
CMonthly payment divided by monthly income
DDown payment divided by the loan amount
Explanation
LTV = Loan Amount / Property Value (lower of appraised value or purchase price). A lower LTV indicates more equity and lower lender risk; higher LTVs often require PMI.
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