Loan to value ratio
This is the ratio of the loan amount to the property valuation expressed as a
percentage. E.g. if a borrower taking out £40,000 on a property worth £100,000
then the loan to value would be 40% if they were borrowing £60,00 on the same
property then the \loan to value would be 60%.
Most lenders are happy to lend 75% loan to value, over that amount lenders
tighten up their criteria as they feel they are taking a bigger risk should they
have to reposess the property in the future there is more of a risk of losing
money on the loan secured on it.