Morgage LTV is explained with a thorough definition Morgage LTV Definition - What is the Loan to Value Ratio Formula?
Apply Online or Call Us Today at 1-888-835-0761


  Apply Now     Refinance    Bad Credit Loan Debt Consolidation Morgage Home Equity Loan   Morgage Calculator
Do You Really Need 4 Morgage Offers - Or Just The Best Offer?
  We don't sell your information to multiple morgage brokers and call it 'competition'
Experienced loan consultants with complete knowledge of mortgage financing
No hassles or obligations - just great service!
One low refinance offer for your morgage ltv

As Heard On CNN, CNBC & FOX Radio
Find out the loan to value ratio for your morgage...
 
Name    
 
Telephone    
 
Email    
 
Loan Goal    
                
Take The Full Application Here
             Points Explained
Morgage Points Explained
  What are morgage points and when, if ever, does it make sense to pay them?
Learn More   
              Fees Explained
Fees Explained
  What are the 'real' costs of my Morgage? This will help explain exactly where your money is going - and where it shouldn't be going...
Learn More 
 
          Morgage Glossary
  Become an informed borrower by familiarizing yourself with common terms used throughout the morgage process...
   
Morgage LTV - Loan to Value Definition

The Morgage LTV ratio is a calculation that expresses the amount of a morgage as a percentage of the value of a home (LTV is an acronym for 'Loan to Value'). For example, if a home is worth $100,000 and it has a morgage of $70,000 on it then the LTV would be 70%.

The Loan to Value is one of the most important risk factors lenders use when qualifying people for a morgage. Since the risk of default is the most pressing concern of a lender the likelihood of absorbing a loss through default is much less on properties with low Loan to Values (because there is greater probability that the home can be sold by the lender to pay for the amount borrowed through the loan). What this effectively means is that the greater the Morgage Loan to Value then the more strict the guideflines for loan qualification become. In fact, this increase in risk is the reason many lenders will require 'Morgage Insurance' on loans with LTV's greater than 80% (Morgage Insurance is a type of insurance for lenders that insures them in the event of a default).

On account of the risk it follows that loans with lower LTV's typically have less fees and loans with higher Loan to Value's typically cost more than there less-risky counterparts. However, there are other factors such as income, assets and credit scores which can nullify a higher LTV. For example, if you have a credit score above 680 and are able to document your income and assets then having a Loan to Value above 80% will have little impact on your interest rate and terms. Conversely, if you have a low credit score and a high Loan to Value your rate will likely be adversely affected.

Combined Loan To Value (or 'Morgage CLTV') is the proportion of all loans on a property in relation to property's value. For example, say you have a first morgage with an LTV of 80% and a 2nd Morgage with an LTV of 10%: your Combined Loan to Value would be 90% (because you add the LTV, i.e., 80% + 10% = 90%LTV)



Other Important Morgage Terms

Negative Points – Points paid by a lender for a morgage with a rate above the rate on a no point loan. Sometimes called rebates because they are used to reduce a borrower’s settlement costs.

No Asset Loan – A documentation requirement where the applicant’s assets are not disclosed.

No Income Loan – A documentation requirement where the applicant’s income is not disclosed.



 
 

Return to the Morgage Home Page

Loan Rates For all Morgage LTV Ratios

Privacy Policy | Bad Credit Morgage | Resources | National Lending

© 2007 All Rights Reserved