Finance

A Nebraska home appraises for $320,000. The buyer is borrowing $272,000. The LTV ratio is:

A80%
B82.5%
C85%✓ Correct
D87.5%

Explanation

LTV = Loan ÷ Value = $272,000 ÷ $320,000 = 0.85 = 85%. At 85% LTV, the buyer has 15% equity and conventional loans typically require PMI.

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