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What Is A Loan To Value (LTV) And How Does It Determine The Size Of The Loan?

April 26, 2017loan LTV size value

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What Is A Loan To Value (LTV) And How Does It Determine The Size Of The Loan?

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The loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: With a 95% LTV loan on a home priced at $125,000, you could borrow up to $118,750 (95% of $125,000), and you would have to pay $6,250 as a down payment.