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Loan To Value Ltv Ratio

Definition of "Loan-to -value (LTV) ratio"

percentage of the mortgage loan principal (amount borrowed) to the property's appraised value or sales price. For example, on a $300,000 house, with a mortgage loan principal of $210,000 the ratio is 70%. Home mortgages exceeding 70% (LTV ratio) usually need private mortgage insurance (PMI).

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