Loan-to-value ratio (LTV) is a measure of the amount of debt used to finance a property relative to the property’s value. It is calculated by dividing the loan amount by the appraised value of the property.
LTV is a key metric used by lenders to assess the risk of a mortgage loan. A higher LTV ratio means that the lender is providing more financing for the property, which increases the lender’s risk. A lower LTV ratio means that the borrower is contributing more equity to the purchase, which reduces the lender’s risk.

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