What is “loan-to-value” ratio?
A. Loan-to-Value Ratio, or LTV as it is commonly referred to, is the ratio of loan amount to the appraised value (or the sales price, whichever is less) of a property. For example, a loan of $700,000 on a property valued at $1,00,000 is a 70% LTV . Lenders have become highly aggressive when it comes to LTV requirements. Some will allow up to 100% LTV. The higher the LTV though the more stringent the lenders become on credit and debt ratio.
