Loan-to-Value Ratio: Definition & Formula


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What is loan-to-value ratio in real estate?

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1. What is the formula to determine loan-to-value ratio?

2. How does a down payment affect the loan-to-value ratio?

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About This Quiz & Worksheet

A key value that is calculated during the process of the sale of a home is the loan-to-value (LTV) ratio. The questions on this quiz/worksheet combo will test your knowledge of the factors that affect the LTV ratio, the formula used to calculate this ratio and how to determine the appraisal value.

Quiz & Worksheet Goals

In this quiz, the questions will cover:

  • Loan-to-value (LTV) ratio definition
  • Formula for determining the LTV ratio
  • How a down payment affects the LTV ratio
  • How the LTV ratio is affected by the sales contract price
  • Who determines the appraised value of a home

Skills Practiced

  • Information recall - access the knowledge you've gained about the formula used to calculate the LTV ratio
  • Reading comprehension - ensure that you draw the most important information from the lesson that discusses the factors that affect the LTV ratio
  • Defining key concepts - ensure that you can accurately define main phrases, such as loan-to-value ratio

Additional Learning

To learn more about this topic, review the lesson called Loan-to-Value Ratio: Definition & Formula. In this lesson you will find:

  • Examples of key factors discussed
  • More about the factors that affect the LTV ratio
  • How an appraised value is determined
  • Example problems using the LTV formula