Let's use a mortgage loan to value example. We will say that you intend on borrowing $80,000.00. An appraisal is required to be done on the property. The appraisal puts a value on the property. Divide the loan amount by the value of the property. It is that simple.
The easiest way to do is this is by using the basics of percentage math. You take the total of your current loan amount and then divide that figure by the total value of the item or property. You will end up with a 2 digit figure in a percentage form.
Take the amount you want to borrow and divide it by the appraised value of the loan's collateral. For example, if you borrow $150,000 on a house appraised at $200,000, the loan-to-value ratio is 75%.
Begin with the purchase price of your property and reduce it by the amount of your down payment to devise the approximate amount of your loan. Then, divide the loan amount by the purchase price or value of the home. This will give you the loan ratio.
