Which of the following is a consequence of high Loan-to-Value Ratios?

A high Loan-to-Value (LTV) ratio indicates that a borrower is seeking to finance a significant portion of the property's value through a loan. This typically means that the borrower has made a smaller down payment, which can increase the lender's risk. Lenders prefer lower LTV ratios because they signify more equity in the property, which serves as a cushion against potential declines in property value. If property values decrease, borrowers with high LTV ratios may find themselves owing more than the property is worth, leading to higher rates of default. Consequently, lenders face a greater risk of financial loss with higher LTV ratios, which can affect their decisions regarding loan approval, interest rates, and terms.

In contrast, increased mortgage affordability, lower borrowing costs, and no effect on the lending process do not accurately capture the implications of high LTV ratios. Higher LTVs typically result in more cautious lending practices rather than promoting affordability or reducing costs.