TeachMeFinance.com - explain loan-to-value ratio
Loan-to-value (LTV) ratio -- a percentage calculated by dividing the amount
borrowed by the price or appraised value of the home to be purchased;
the higher the LTV, the less cash a borrower is required to pay
as down payment.
loan-to-value ratio -- the relationship, expressed as a percent, of the amount of money loaned to the appraised value of the real estate pledged as security for the loan. For example, an $85,000 loan on a $100,000 house would have a loan-to-value ratio of 85 percent.
About the author
Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.