Finance
A Utah lender's loan-to-value ratio limit protects the lender because:
AIt ensures the borrower has more skin in the game and reduces the risk of default loss✓ Correct
BIt increases the borrower's monthly payment
CIt guarantees the appraisal will meet the purchase price
DIt eliminates the need for title insurance
Explanation
By requiring a down payment (limiting LTV), the lender ensures the borrower has equity at risk. If the borrower defaults, the property's value provides a cushion for the lender to recover the loan balance.
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