Loan-to-Value Ratio (LTV)
The ratio of the loan amount to the property value, used to size a loan and to decide whether PMI applies.
Loan-to-value is the loan amount divided by the property value, expressed as a percentage. Lenders use it to measure risk. When the appraised value and the sale price differ, the lender uses the lower of the two.
On a conventional loan, an LTV above 80 percent generally requires private mortgage insurance. A 20 percent down payment produces an 80 percent LTV and avoids PMI.
On the exam
Worked example
A 252,000 dollar loan on a 280,000 dollar value is a 90 percent LTV, so PMI applies.
Exam trap
Tested in
Computations and Closing (6% of the exam)
From definition to recall
See this term inside a real exam question.
Pass Florida gives you Florida-specific practice, diagnostics across the 19 exam areas, Trap Library, Math Coach, offline access, and one $39.99 purchase. No subscription. No copied exam questions.
Try 5 free questionsRelated terms
This definition is Florida real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.