Loan-to-Value Ratio

The loan-to-value ratio (LTV) plays a significant role in mortgage lending and refers to the process of lending against collateral. LTV describes the ratio of the loan amount to the market value of the property. The maximum share of the loan amount in the collateral is indicated by the loan-to-value ratio and generally does not exceed 80%. Conversely, this means that at least 20% of the purchase price must be financed from equity when buying a property.

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