What is the loan-to-value ratio (LTV)?
It is the ratio determined by dividing the loan amount by the value of the property or the sales price, whichever is less. The loan-to-value ratio (LTV) is one consideration in qualifying you for a loan. To calculate the LTV, divide the amount you are borrowing by the value of the subject property. For example, if you are purchasing a property that is selling and appraising for $200,000 and you would like to borrow $100,000, the LTV is 50%.
