Finance
What does the loan-to-value (LTV) ratio measure?
AThe ratio of monthly payments to gross income
BThe ratio of the loan amount to the appraised value of the property✓ Correct
CThe ratio of fixed to variable interest expenses
DThe ratio of down payment to total closing costs
Explanation
LTV = Loan Amount / Appraised Value. A higher LTV means more risk for the lender. LTV affects PMI requirements, interest rates, and loan eligibility.
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