Finance
What is the loan-to-value (LTV) ratio and why is it important to Nevada lenders?
AThe ratio of monthly income to monthly housing costs
BThe ratio of the loan amount to the appraised value of the property, used to assess lender risk✓ Correct
CThe ratio of property taxes to loan payments
DThe ratio of equity to total purchase price
Explanation
LTV = Loan Amount / Appraised Value. A higher LTV means more risk for the lender (less equity cushion). Nevada lenders use LTV to determine loan approval, interest rates, and whether PMI is required.
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