- Different mortgage lenders will have different criteria for LTV ratios, but most prefer a ratio of 80% or below.Mortgages with higher LTV ratios pose a greater financial risk to a lender. The more you borrow relative to a home’s total value, the more money a lender must put on the line — and the less likely the lender is to recoup its money should you default on the loan. So, generally speaking, the lower your LTV ratio the better.If a LTV ratio exceeds 100%, the mortgage is considered “underwater,” meaning the borrower owes more than the property securing the loan is worth. A mortgage might become underwater as the result of missed payments, or because the property’s value has decreased over time.
What is a good LTV Ratio?
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