Question

You sell a home for a client where the down payment was $30,000 with a loan of $125,000 at 3.7% interest with a term of 30 years fixed. The mortgagor's monthly payment is $1,219. What is the loan to value ratio?

Answer 1

76%

Step-by-step explanation:

The computation of loan to value ratio is shown below:

Loan to value ratio equals to

= (Loan amount - down payment) ÷ (Down payment)

= ($125,000 - $30,000) ÷ ($125,000)

= ($95,000) ÷ ($125,000)

= 76%

Simply we applied the above formula and the other details are not relevant i.e monthly payment, interest rate and tenure. Hence, ignored it