A property appraises at $350,000. The borrower puts down $52,500. What is the LTV?

Correct answer: 85%

LTV = (Loan Amount ÷ Property Value) × 100. Loan Amount = $350,000 − $52,500 = $297,500. LTV = $297,500 ÷ $350,000 = 85%. Because LTV exceeds 80%, private mortgage insurance (PMI) will be required on a conventional loan. The down payment of $52,500 represents exactly 15% of the property value. For exam purposes, always calculate LTV using the loan amount divided by the lesser of appraised value or purchase price.