Loan-to-value (LTV) is a ratio that compares the amount of a mortgage loan to the value of the property.

It is calculated by dividing the loan amount by the property's value or purchase price and multiplying by 100.

For example, if you buy a home appraised at $200,000 for its appraised value, and make a $20,000 down payment, you will borrow $1800,000. This results in an LTV ratio of 90% (i.e., 180,000/200,000).

Lenders use LTV to determine your down payment, interest rate, and credit eligibility. Lower LTVs indicate less risk for lenders.

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