Loan to Value Ratio
The amount of mortgage debt that a lender can or may loan to a borrower compared to the market or appraisal value of a property being pledged as collateral expressed as a percentage. The greater the loan-to-value ratio, the greater the financial leverage available to the purchaser.For example, an 80% loan to value ratio on a $100,000 property means a mortgage of up to $80,000 may be obtained.