Underwriting
Loan-to-value ratio (LTV)
The loan amount as a percentage of the property’s value or price
Lenders use it as the primary measure of their exposure. A larger down payment means a lower LTV, less risk to the lender and generally better terms for the borrower.
How the exam asks about it
On conventional loans, an LTV above 80 percent generally triggers private mortgage insurance — a link the exam tests directly.
Related terms
Sitting the license exam? Find out what you actually know.
Free practice questions built to the published national content outline, with an explanation after every answer. No account, no paywall.
Independent exam preparation. Real Estate Exam Bank is not a state-approved pre-licensing course and completing anything here does not satisfy any state education requirement. Not affiliated with, endorsed by, or authorized by any state real estate commission, Pearson VUE, or PSI. Practice questions here are original study material, not the official exam.