The loan-to-value (LTV) ratio is the mortgage loan balance divided by the home’s value. It shows how much you’re borrowing from a lender as a percentage of your home’s appraised value.
The higher your LTV, the riskier you’ll appear during the loan underwriting process because a low down payment denotes less equity or ownership in your property making you more likely to default on your loan. Considering a career in real estate? Check out our upcoming pre-licensing courses here: tocrres.com/register