The loan-to-value (LTV) ratio is a key metric mortgage lenders use to assess their risk of lending you money. Most lenders use the LTV ratio, credit score, debt-to-income ratio, interest rate, and property value when processing your mortgage application. The loan-to-value ratio affects the amount of down payment the lender requires.
Simply put—the lower your LTV ratio, the better your chance of getting finance approved at a competitive rate.
This article is a complete guide to understanding LTV ratios and how they can help you make wise property investments. You will also find out how to calculate LTV ratios. Additionally, you will get key insights into securing cheaper financing terms.
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