In short, this is the ratio between what you owe on your house and what it's worth. That means your mortgage LTV ratio is 80 percent, because your loan amount is 80 percent of the value of the home. For example, if you plan to use the money to consolidate revolving credit debt, bankers see that as a positive. If they see you are using it to improve your risk profile they know that they are more likely to get repaid. Borrowers who can't provide all the necessary documents to back up the numbers the lender is looking for may be denied credit or charged a higher interest rate.
Penalties can be tough for borrowers who give false information to obtain credit.
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