Definition: What is Loan to Value Ratio?
Loan to Value ratio (LTV) is risk assessment measurement which is used to calculate the loan amount as a percentage of the appraised value of the collateral.
LTV ratio mostly used in the mortgage industries. During the process of mortgage application banks, underwriters, and other financial institutes use the LTV calculation to determine the down payment which requires to purchase the home.
Every lender has the requirement which must be approved then lender issues the loan. For different lender these requirements different.
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