Loan-to-Value Ratio (LTV)
Loan amount divided by the lesser of price or appraised value. LTV drives lending risk decisions, mortgage insurance requirements, and rates — and it is why a low appraisal directly constrains how much a buyer can borrow.
Related Terms
Mortgage
A loan secured by real property, giving the lender a lien and the right to foreclose on default.
Private Mortgage Insurance (PMI)
PMIInsurance protecting the lender on conventional loans above 80% LTV, paid by the borrower.
Market Value
The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus..
More in Legal & Regulatory
View allUniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)
FIRREAThe 1989 federal law that established the modern appraisal regulatory framework, requiring state licensing of appraisers and USPAP compliance for all federally related real estate transactions..
Dodd-Frank Act (Appraisal Provisions)
The 2010 federal financial reform law that included significant appraisal provisions: appraiser independence requirements, AMC registration, customary and reasonable fee mandates, and prohibition of BPOs for origination..
Appraiser Independence
The legal requirement that appraisers must be free from improper influence, coercion, or pressure from parties with a financial interest in the transaction outcome.