Loan to value ratio or LTV is a measure of assessing the risk that a lender will face in case he lends to a person. If the lender assesses that the borrower has a high loan to value ratio, then the lender will ask for a higher interest rate as compensation.
Loan to value ratio is calculated by dividing the amount of the mortgage by the appraised value of the property. Assume a person who wants to buy a house with an appraised value of $200,000 and pays the bank $40,000 as a down payment and borrows $160,000 as a mortgage. The Loan to Value ratio will be as follows
LTV = Loan Value / Appraised Value = $160,000 / $200,000 = 80%
1. Using Your Personal Financial Plan Sheet 22, compare the
1. Jamie Lee is considering a used vehicle, but cannot
Newlyweds Jamie Lee and Ross have had several milestones in the past
Troy has a credit card that charges 18% on outstanding balances
Nick and Nora are married and have three children in college.
Gene and Dixie, husband and wife (ages 35 and 32
How is the market for a stock created? How do brokerage
1. What is the benefit to Jamie Lee and Ross investing
Ted Riley owns a 2012 Lexus worth $40,000.
Julie wants to open a bank account with $75. Julie
