GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following is the ratio of the loan principal to the appraised value?
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Mortgage Loan
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Loan-to-Value Ratio
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Statutory Liquidity Ratio
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Combined Loan To Value: (CLTV) ratio
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Explanation:
Detailed explanation-1: -Loan-to-value (LTV) is calculated simply by taking the loan amount and dividing it by the value of the asset or collateral being borrowed against. In the case of a mortgage, this would be the mortgage amount divided by the property’s value.
Detailed explanation-2: -For Example. If you owe $150, 000 on your mortgage and your home is worth $200, 000, your LTV would be 75%. Meaning you still owe 75% of the homes value but you have 25% ownership or equity in your home. Requirements. Most banks require LTV’s to be lower than 80 – 85%.
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