Finance
The loan-to-value (LTV) ratio is calculated as:
ALoan amount ÷ Purchase price × 100
BLoan amount ÷ Appraised value × 100✓ Correct
CThe lower of purchase price or appraised value ÷ Loan amount × 100
DAppraised value ÷ Loan amount × 100
Explanation
LTV = Loan amount ÷ Appraised value × 100. Lenders use LTV to assess risk. Higher LTVs typically require private mortgage insurance (PMI) on conventional loans.
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