Finance
In New York, 'loan-to-value ratio' (LTV) is calculated as:
AThe loan amount divided by the borrower's annual income
BThe loan amount divided by the appraised value (or purchase price, whichever is lower)✓ Correct
CThe purchase price divided by the down payment
DThe monthly payment divided by the gross monthly income
Explanation
LTV = Loan Amount / Appraised Value (or purchase price, whichever is lower). For example, on a $400,000 purchase with a $320,000 loan, LTV = $320,000 / $400,000 = 80%. LTV is a key underwriting metric; higher LTVs indicate more risk for the lender and typically require PMI on conventional loans.
Related New York Finance Questions
- What is a 'lock-in' or rate lock in mortgage lending?
- In New York, 'warehousing' of mortgage loans refers to:
- In New York, an FHA (Federal Housing Administration) mortgage loan is insured by the federal government, which means:
- In New York, which of the following best describes an 'ARM' (adjustable-rate mortgage)?
- In New York, the 'FHA 203(b)' program is used for:
- A New York City commercial property is being purchased using a '1031 exchange' (like-kind exchange). The purpose is to:
- New York's 'SONYMA' (State of New York Mortgage Agency) provides:
- In New York, 'subordination' of a mortgage means:
Practice More New York Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New York Quiz →