Loan To Value

What is LTV?

LTV stands for Loan To Value. It is a financial ratio that is used to measure the risk of a loan. It is calculated by dividing the amount of the loan by the appraised value of the property.

How is LTV calculated?

LTV is calculated by dividing the loan amount by the appraised value of the property. For example, if the loan amount is $80,000 and the appraised value of the property is $100,000, the LTV would be 80%.

What is a good LTV ratio?

A good LTV ratio depends on the lender's requirements and the type of loan. In general, a lower LTV is better as it indicates a lower risk to the lender. However, different lenders may have different requirements for what they consider to be a good LTV ratio.

How does LTV affect mortgage rates?

The LTV ratio can affect mortgage rates. Generally, a lower LTV ratio may result in a lower interest rate and vice versa. This is because a lower LTV ratio indicates a lower risk to the lender, which may result in lower interest rates.