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What is Loan-to-Value (LTV)?

April 26, 2017loan-to-value LTV

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What is Loan-to-Value (LTV)?

3 Answers

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Loan-to-Value (LTV) ratio is the percentage of the mortgage amount and the appraised value or sales price, whichever is lower. If the sales price is $100,000. and the appraised value is $102,000. and the mortgage amount is $75,000., the loan to value would be 75% ($75,000 divided by $100,000). The lender is lending 75% of the value of the property.

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LTV is the ratio between the loan amount and the appraised value or the sales price, whichever is lower. A loan amount of $80,000 with a purchase price of $100,000 would be an 80% LTV.

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This is a ratio of the amount of money you wish to borrow compared to the sales price or value of the home you want to purchase. A 75% LTV on a $100,000 home would equal a $75,000 loan. The property value is determined by the appraised value or purchase price, whichever is less.