Real Estate Finance
The ratio of a loan amount to the appraised value (or sale price, whichever is lower) of the financed property.
LTV is calculated as Loan Amount ÷ Property Value, expressed as a percentage. It measures lender risk: higher LTV means less borrower equity and more lender exposure. Conventional loans typically require PMI when LTV exceeds 80%. FHA loans permit LTV up to 96.5%. VA loans permit 100% LTV for eligible veterans. Lenders use the LOWER of appraised value or sale price as the denominator to prevent inflated valuations from skewing the ratio.
Exam Tip
LTV = Loan ÷ Value. Quick shortcut: 100% − Down Payment % = LTV. > 80% LTV typically requires PMI on conventional loans.
Full definition locked
Unlock all 100+ glossary definitions, study modules, practice exams, and Carl — your AI tutor.
Start free →One-time $49 · No subscription
Study Guide
Real Estate Finance
Key concepts and exam tips →
Practice
NY Real Estate Finance
Free sample questions →
Preparing for the NY Real Estate Exam?
Unlocked covers Loan-to-Value Ratio (LTV) and every other concept on the NY Real Estate Salesperson Exam — with study modules, practice questions, spaced-repetition flashcards, and Carl, your AI tutor.
click for a haiku!