Loan-to-value, or LTV, compares how much you're borrowing to how much the asset is worth.
The loan-to-value ratio is the loan amount divided by the appraised value of the collateral, expressed as a percentage.
A lower LTV means more borrower equity and less lender risk, which can influence approval and terms. Acceptable LTVs vary by lender and program.
Borrowing $300,000 against land appraised at $400,000 is a 75% loan-to-value ratio.
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