Question

The loan-to-value ratio on a home with a sales price of $100,000 and a conventional loan of $90,000 is

a) 80%
b) 90%
c) 100%
d) 110%

Answer 1

b) 90%

The loan-to-value ratio for a home with a sales price of $100,000 and a loan of $90,000 is 90%.

Step-by-step explanation:

The loan-to-value (LTV) ratio is calculated by dividing the amount of the mortgage by the home's sale price or appraised value and then multiplying by 100 to get a percentage. In this case, if a home has a sales price of $100,000 and a conventional loan of $90,000, the loan-to-value ratio is calculated as ($90,000 / $100,000) × 100%, which equals 90%. Therefore, the correct answer is b) 90%.