Real Estate Math

A NH buyer puts $55,000 down on a $275,000 home. What is the LTV ratio and will the buyer need PMI on a conventional loan?

ALTV 80%; no PMI required✓ Correct
BLTV 20%; PMI required
CLTV 80%; PMI not required
DLTV 79.6%; PMI not required

Explanation

LTV = ($275,000 − $55,000) / $275,000 = $220,000 / $275,000 = 80%. At exactly 80% LTV, PMI is typically NOT required for conventional loans (PMI is required when LTV exceeds 80%).

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