Loan to Valuation Ratio is a percentage that is calculated by dividing the amount of the loan by the purchase price or appraised value of the mortgaged property. This is usually a key indicator of risk to a lender when considering a lending scenario. Typically no higher than 60% for LoDoc Loans, no higher than 80% without Lender Mortgage Insurance, and no higher than 97% for mainstream lenders.
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The Loan to Value Ratio plays an important role in determining how much risk lenders attach to your home loan. You need to understand what it means and how it may affect your ability to borrow.
Interest is the biggest burden you face when taking out a home loan. Anything you can do to keep interest payments low will benefit you in the long run. A mortgage offset account allows you to do just that.