Which of the following accurately defines a "loan to value" ratio?

The "loan to value" ratio (LTV) is indeed defined as the total amount of the loan divided by the appraised value of the property. This ratio is a crucial metric used by lenders to assess the risk associated with lending to a borrower. A higher LTV indicates that a borrower has less equity in the property, which can increase the lender's risk in case of default.

In practical terms, the LTV ratio helps determine the borrower’s eligibility for a loan, the terms of that loan, and potentially whether mortgage insurance is required. For example, if a borrower is purchasing a home appraised at $200,000 and takes out a loan for $160,000, the LTV ratio would be 80% (which is calculated as $160,000 divided by $200,000). This is a standard calculation that lenders use to make informed lending decisions.

The other choices do not align with the definition of LTV. For instance, the total cost of the property divided by the interest rate does not provide meaningful insight into the equity or risk associated with the loan. Similarly, the total amount the borrower can repay over the life of the loan does not factor in appraised values and is instead more indicative of cash flow