Finance
What does LTV stand for and why does it matter to lenders?
ALoan Term Value — affects how long you can borrow
BLoan-to-Value ratio — measures lender risk by comparing loan amount to property value✓ Correct
CLender Transfer Value — determines refinancing eligibility
DLiability Transfer Value — determines insurance requirements
Explanation
LTV (Loan-to-Value) ratio = Loan Amount ÷ Appraised Value. A higher LTV means more risk for the lender. LTV above 80% typically requires private mortgage insurance (PMI). Lenders use LTV to assess collateral adequacy.
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