How does LTV based on original value differ from LTV based on a new appraisal?
LTV ratio based on the original property value takes into consideration your current principal balance compared to the original property value. For example, if your principal balance is currently $80,000 and the original property value was $100,000, then your current LTV ratio based on the original property value is: Current Principal Balance /Original Property Value – $80,000 / $1000000 = 80.0% LTV ratio based on a new appraisal takes into consideration increases in property value that may have been realized since the loan was originated. For example, if your principal balance is currently $80,000 and the home you originally bought for $100,000 has increased in value to $122,000, then your current LTV ratio based on the property’s new appraised value is: Current Principal Balance /New Appraised Value – $80,000 / $122,000 = 65.5% To determine the current property value, an SFN approved appraiser will perform a new appraisal obtained at the expense of the borrower.
Related Questions
- When there is review appraisal performed on a loan and the original appraisal value comes into question, who will manage the rebuttal process?
- Can I refinance my house up to the full appraisal amount or 100% loan to value (LTV) with a VA Mortgage Loan?
- How can an appraisal of a model(s) home be used to establish a market value for calculating the LTV ratio?
