Given a sales price of $125,000, a first mortgage of $80,000, a second mortgage of $24,500, and an appraised value of $137,000, what is the LTV and CLTV?

To determine the Loan-to-Value (LTV) and Combined Loan-to-Value (CLTV) ratios, we must first understand how these ratios are calculated.

The Loan-to-Value (LTV) ratio is calculated as the amount of the first mortgage divided by the appraised value of the property. In this case, the first mortgage is $80,000 and the appraised value is $137,000.

Calculating LTV:

[

LTV = \frac{First Mortgage}{Appraised Value} = \frac{80,000}{137,000} \approx 0.5832 \text{ or } 58.32%

]

For simplicity or rounding purposes in the context of the exam, this could be approximated to 60%.

The Combined Loan-to-Value (CLTV) ratio adds the amounts of all mortgages and divides that total by the appraised value of the property. The sum of the first mortgage and the second mortgage ($80,000 + $24,500 = $104,500) is then divided by the appraised value.

Calculating CLTV:

[

CLTV = \frac{First Mortgage + Second Mortgage}{Appraised Value} = \frac{