home mortgage
Understanding loan-to-value ratios will aid a home buyer when determining what to pay on a down payment. Before the burst of the housing bubble, it was common for banks to provide the full balance of the purchase price of a home. Lending institutions were confident that they would eventually make a profit on the interest no matter what they provided to the lessee on a homemortgage. Today, these ratios are much lower, averaging at about %50 the value of the home. Banks’ propensity for risk is much lower than it was even three years ago.