01
Loan-to-value ratio is calculated by dividing the amount of a loan by the value of the property or other collateral securing it, then expressing the result as a percentage.
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02
For a standard Fannie Mae purchase-money transaction, LTV is calculated using the lower of the sales price or current appraised value as the property value.
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A larger down payment generally produces a lower LTV ratio because the amount financed is smaller relative to the property value.
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