What is Loan-to-Value Ratio?
A definition of Loan-to-Value Ratio
“Loan-to-value ratio is a financial term used by lenders to express the ratio between a loan amount and the appraised value of an asset or property being financed.”

Business Glossary > What is Loan-to-Value Ratio?
Examples of Loan-to-Value Ratio in a Sentence:
The loan-to-value ratio is important for mortgage approval.
A high loan-to-value ratio indicates more risk for lenders.
Lower loan-to-value ratios typically offer better loan terms.
Why is Loan-to-Value Ratio Important in Business?
Understanding the loan-to-value ratio helps both lenders and borrowers assess the risk involved in a loan. For borrowers, it can influence loan affordability, interest rates, and approval chances.
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Associated Terms
Here are some associated business terms and synonyms for “Loan-to-Value Ratio”:
- LTV
- Mortgage Ratio
Chase Bank Loan-to-Value Ratio
Chase Bank employs the loan-to-value ratio to evaluate mortgage applications. By comparing the loan amount against property value, Chase ensures loans are granted within acceptable risk levels, offering better rates for lower LTV ratios.
Final Notes on Loan-to-Value Ratio
Borrowers should understand the importance of loan-to-value ratios when seeking financing, as it affects terms and conditions. Being informed can aid in negotiating better loan deals.
This has been a definition of Loan-to-Value Ratio meaning.
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