What term describes the maximum amount of property a borrower can obtain from a lender?

The term that describes the maximum amount of property a borrower can obtain from a lender is the loan-to-value ratio. This ratio is a critical financial metric that lenders use to assess the risk of a mortgage loan. It compares the amount of the loan to the appraised value of the property being financed. Essentially, the loan-to-value ratio indicates how much equity the borrower has in the property relative to the loan amount. A lower ratio suggests that the borrower has a significant equity stake, which typically makes them a more favorable candidate for loans and could lead to better loan conditions.

In terms of context, unlike other choices, the concept of debt capacity refers to a borrower's overall ability to take on and repay debt, but it doesn't specifically define the maximum loan amount based on property value. Equity denotes the ownership value in the property after all debts owed on the property are subtracted, not the loan amount itself. The term loan limit generally refers to the maximum lending amount set by a lender, which could vary based on other factors and isn't necessarily a direct derivative of the property value in the way that the loan-to-value ratio operates.