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High-Ratio Loan
Commercial loans or other real estate loans in which the loan-to-value (LTV) ratio is high.
For instance, home equity refinancing loans are typically made for 125% of the market value of a home. This makes these loans inherently high-risk and thus they are reserved for only the lowest-risk borrowers since a portion of the loan is unsecured and where the lender is gambling on the borrower's integrity and the local market continuing to appreciate.
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