Financing, 9% of the examination
Loan-to-value ratio (LTV)
The loan amount divided by the property's value or other underwriting basis, expressed as a percentage.
Also called: LTV
For a purchase, underwriting commonly uses the lower of price or appraised value, though an exam question may state the basis directly. LTV measures leverage, not the borrower's total cash to close, because closing costs, credits, and deposits are separate figures.
Test the distinction
A relevant question from Financing, selected because its facts or explanation use this concept.
What is the maximum loan-to-value ratio before a conventional loan normally requires private mortgage insurance?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
Primary sources
Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.