A home priced at $330,000 is financed at 80% loan-to-value ratio. How much money is needed for the down payment?

To determine the amount needed for the down payment, it's essential to understand how a loan-to-value (LTV) ratio functions. In this scenario, the home is priced at $330,000 and has an LTV of 80%.

The LTV ratio indicates the percentage of the home's value that is covered by the loan. When a property has an LTV of 80%, it means that the lender will provide financing for 80% of the home's value, and the remaining 20% represents the homeowner's equity, which is the down payment.

Calculating the loan amount involves taking 80% of the home's price. For a home priced at $330,000, you would multiply this amount by 0.80:

Loan Amount = Home Price x LTV Loan Amount = $330,000 x 0.80 Loan Amount = $264,000

Now, to find out how much money is needed for the down payment, you subtract the loan amount from the home price:

Down Payment = Home Price - Loan Amount Down Payment = $330,000 - $264,000 Down Payment = $66,000

This down payment amount is the portion that the homebuyer needs to pay upfront,