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Why does the interest rate increase as the Loan To Value (LTV) increases?

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Why does the interest rate increase as the Loan To Value (LTV) increases?

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A. Since the risk is greater for larger LTV’s, the rate is higher to help compensate for the greater risk. The vast majority of hard money lenders restrict their loans to 50% to 65% of value. We will loan up to 80% LTV.

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