Loan-to-Value Ratio (LTV)

What is Loan-to-Value Ratio (LTV)?

Loan-to-Value Ratio (LTV) meaning in finance or banking terminology / glossary / dictionary is:
The ratio of the loan principal (amount borrowed) to the appraised value (selling price). For example, on a $100,000 home, with a mortgage loan principal of $80,000, the loan-to-value ratio is 80 percent. The LTV will affect programs available to the borrower; generally, the lower the LTV, the more favorable the program terms offered by lenders.

 

reference: Dictionary of Banking Terms and Phrases helpwithmybank.gov