Finance
A loan-to-value ratio (LTV) of 80% means that the borrower is financing:
A20% of the purchase price
B80% of the purchase price✓ Correct
C80% of the appraised value minus the down payment
DThe loan balance is 80% of the remaining equity
Explanation
An LTV of 80% means the loan amount equals 80% of the property's value or purchase price. The borrower is making a 20% down payment. Lenders often require private mortgage insurance (PMI) when LTV exceeds 80%.
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