What is the LTV (Loan-to-Value) ratio for a $100,000 purchase with 20% down?

The Loan-to-Value (LTV) ratio is a financial term used by lenders to assess the risk of a loan. It represents the ratio of a loan amount to the appraised value of the property, expressed as a percentage. To calculate the LTV ratio, you can use the formula:

LTV = (Loan Amount / Property Value) x 100%

In this scenario, the property purchase price is $100,000, and the buyer is making a 20% down payment. The down payment amount is calculated as follows:

Down Payment = Purchase Price x Down Payment Percentage

Down Payment = $100,000 x 20% = $20,000

The amount being financed (the loan amount) is then the purchase price minus the down payment:

Loan Amount = Purchase Price - Down Payment

Loan Amount = $100,000 - $20,000 = $80,000

Next, you can input the loan amount and the property value to find the LTV:

LTV = ($80,000 / $100,000) x 100% = 80%

Thus, the LTV ratio for this scenario is 80%. This value indicates that the loan covers 80% of the property's value, which