A property is valued at $400,000. The borrower is making a $60,000 down payment and obtaining a first mortgage of $300,000 and a second mortgage of $40,000. What is the CLTV ratio?
Correct Answer
B) 85%
CLTV (Combined Loan-to-Value) includes all liens against the property. Total loans = $300,000 + $40,000 = $340,000. CLTV = $340,000 ÷ $400,000 = 85%. CLTV considers all mortgages, while LTV only considers the first mortgage.
Why This Is the Correct Answer
CLTV (Combined Loan-to-Value) includes all liens against the property. Total loans = $300,000 + $40,000 = $340,000. CLTV = $340,000 ÷ $400,000 = 85%. CLTV considers all mortgages, while LTV only considers the first mortgage.
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