Finance
In South Dakota, the 'loan-to-value ratio' (LTV) of a mortgage is calculated as:
ALoan amount divided by the borrower's annual income
BLoan amount divided by the appraised value or purchase price (whichever is lower), expressed as a percentage✓ Correct
CThe monthly payment divided by the loan amount
DThe interest rate divided by the loan term
Explanation
LTV = Loan Amount ÷ (Lesser of Appraised Value or Purchase Price) × 100. A higher LTV means less equity and greater risk for the lender.
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