Finance
The 'loan-to-value ratio' (LTV) is important to lenders because a lower LTV indicates:
AGreater borrower risk
BLess equity protecting the lender against default losses
CMore borrower equity, providing a larger cushion against losses in foreclosure✓ Correct
DA higher probability of borrower default
Explanation
A lower LTV means the borrower has more equity in the property. This protects the lender because even if the borrower defaults and the property must be sold at a discount, the lender is more likely to recover the full loan amount. Lower LTV = lower lender risk.
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