Loan-to-Value Ratios

Loan-to-Value (LTV) ratios are important numbers that help lenders decide how much money they can lend you when you want to buy a house or another property. If the ratio is high it can signal that you might not have enough money invested in the property which could make the lender nervous. This is why most lenders prefer an LTV ratio of 80% or lower as it shows that you have a good amount of equity in the property right from the start. Understanding LTV ratios can help you when you are thinking about buying a home. If you know what your LTV ratio is you can make better decisions about how much money you need to save for a down payment and what kind of loan you can afford.

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