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what does LTV represent

by rewallen684 from , California. Jul 10th 2016 Reply


I am from West Virginia not California

Jul 10th 2016
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Scott Fix (ScottFix)
#1351 ranked lender in California - 184 contributions

Loan to Value. Example, if you have a property which is valued at 100,000 and you owe 80,000 on your mortgage, your loan to value is 80%. It is the loan as it compares to the value of your home. To find your LTV on any home use the following equationCurrent Loan balance divided by Value of the home. Be aware that there are many homes which have a loan to value which is greater than the home value itself. For example, if your current loan is 120K and he homes value is 100K, your LTV is 120%. Negative equity - Ouch. Happens. Typically seen in many short sale situations. I hope this helped. All the best, Scott.

Jul 11th 2016
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,414 contributions

LTV is an acronym for "Loan to Value".. This represent the ratio between what is owed or borrowed (first position loan) against a property vs. the property's value.. Owing $80K against a property that's worth $100K is 80% LTV.. but if you owe $120K on a property worth $100K, then your LTV is 120%.. There's also 2 other acronym's you need to know.. CLTV is "Combined loan to value".. This is when you have 2 mortgages against the same property.. in this scenario, lenders will look at your LTV (first position loan), and your CLTV (combined first and 2nd against the property's value).. Then there's HCLTV "High Combined Loan to Value".. this is used when your 2nd mortgage is a home equity line of credit. (HELOC). Example: you have a home worth $200K, a first mortgage of $100K (50% LTV) and a $50K 2nd that's a HELOC, but you don't own anything on the HELOC.. for lending purposes, you have a 75% HCLTV.. the assumption is that even though you don't owe anything on the 2nd HELOC, you could borrow against it the day after you close on your refi, which would increase your payment and put you above qualifying ratios.. so if you are applying for a refinance, and you have a HELOC, then the lender will add a "Ghost Payment" to your ratios equal to what your payment would be if you maxed out the HELOC. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Jul 11th 2016
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