Finance
The loan-to-value (LTV) ratio is calculated as:
ALoan amount divided by the property's purchase price times 100✓ Correct
BDown payment divided by the property's appraised value times 100
CProperty value divided by loan amount times 100
DAnnual income divided by the loan amount times 100
Explanation
LTV ratio = (Loan Amount ÷ Appraised Value or Purchase Price, whichever is lower) × 100. Lenders use the LTV ratio to assess risk; higher LTV ratios generally mean more risk for the lender.
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