Loan-to-Cost Ratio

Loan-to-Cost Ratio

The loan-to-cost ratio measures the size of a development or construction loan relative to the costs of a commercial development or real estate project (purchase of land, associated taxes and other fees, actual build and associated costs). Lenders will factor in the LTC to determine how much it is prepared to lend against the project at inception and the pricing of any development or construction loan facility.

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