Loan-to-Value (LTV) Ratio

The Loan-to-Value Ratio (LTV) is a financial metric that measures the mortgage loan amount to the value of the property being financed. It is an important factor in determining the risk associated with a loan. LTV is commonly used by lenders to assess the level of collateral for a mortgage. A higher LTV indicates a higher risk for the lender, as it means the borrower has less equity in the property. Lenders typically have maximum LTV limits that borrowers meet to qualify for a loan.