In general, lenders prefer borrowers to have a lower loan-to-value ratio when buying a house.
A lower ratio means that the borrower has more equity in the property and is less likely to default on the loan.
A lower ratio can also mean that the borrower may qualify for a lower interest rate on the mortgage, which can save them thousands of dollars over the life of the loan.
When buying a house, there are several factors that can impact your loan-to-value ratio.
The first factor is the amount of the down payment you make.
A larger down payment will reduce the amount of the loan, and therefore lower your loan-to-value ratio.
For example, if you put 20% down on a $300,000 house, your loan-to-value ratio would be 80% ($240,000 / $300,000 x 100).
However, if you put 10% down on the same house, your loan-to-value ratio would be 90% ($270,000 / $300,000 x 100).