LTV
Also known as loan to value
Loan to value is the size of a loan as a percentage of the value of the property securing it.
Why It Matters
It measures how much room there is before a lender is exposed, and falling valuations can breach it without any missed payment.
Related Terms
- MortgageA mortgage is a loan secured against property, repaid over a long period, where the lender can take the property if payments stop.
- DSCRThe debt service coverage ratio is a property's net operating income divided by the debt payments due on it.
- Property ValuationProperty valuation is the estimation of what a building is worth, from comparable sales, from the income it produces, or from the cost to replace it.
- Credit RiskCredit risk is the risk that a borrower fails to pay interest or repay principal as agreed.
Continue Exploring
Follow VANTAGE52 for continuing coverage of real estate and markets.