Mortgage

Answer:

Loan-to-value (LTV) is calculated simply by taking the loan amount and dividing it by the value of the asset or collateral being borrowed against. In the case of a mortgage, this would be the mortgage amount divided by the property's value. For example, if your home is valued at $150,000 and your mortgage was $130,000, your LTV would be $130,000/$150,000, or 87%. That ratio helps a bank determine if they can make a loan, the loan's risk level, and other factors.

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