Lenders use the lesser of the sales price or appraised value to calculate the loan-to-value ratio (LTV).
This results in LTV of 75% ($300,000/$400,000).
How do you calculate the loan-to-value ratio?
To figure out your LTV ratio, divide your current loan balance (you can find this number on your monthly statement or online account) by your home's appraised value.
Multiply by 100 to convert this number to a percentage. Caroline's loan-to-value ratio is 35%.
