Final answer:
A high loan to value ratio implies a lower owner's equity, as equity is the difference between the property's value and the remaining loan balance. Equity decreases if the loan amount increases relative to the property's value.
Step-by-step explanation:
If the loan to value ratio is high, it indicates that the loan amount is high relative to the property's assessed value. As a result, this means that the owner's equity is lower, not higher, because equity is calculated as the property's value minus the loan balance. For example, if the market value of a house is $250,000 and the remaining balance on the loan is $100,000, the owner's equity would be $150,000. If a new loan is taken out that is of a higher value, the loan to value ratio increases and the available equity decreases accordingly.