Loan-To-Value
Author: Terri Ewing | Date: August 14, 2008 | Filed In: Glossary
Loan-To-Value (LTV) Defined
Loan to value is the percentage of the mortgage compared to the value of a home. Most often it is referred to as LTV.
To calculate the LTV, divide the mortgage amount by the value.
For example, the mortgage is $80,000 and the home is worth $100,000 so divide $80,000 by $100,000 and you get 80%. The LTV or loan-to-value is 80%.
Loan to value is used in approving a mortgage and it also can affect what rate you will get. The higher the loan-to-value the more risk associated with that loan.
Author: Terri Ewing
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