LTV is the Loan-to-Value ratio comparing the balance of your mortgage loan to the value of your home.
There are so many acronyms to keep straight in the home buying process. LTV is one of the most important and the most complicated.
LTV – or Loan-to-Value – is important to understand in order to make sure you are getting the best mortgage product for your financial needs.
LTV is the ratio created by comparing the value of your loan against the value of your home. In other words, it’s the comparison between the amount of money a homeowner is borrowing against the home’s appraised value.
The LTV ratio comes into play during both a home purchase and a refinance but the ratio can vary depending on the appraised value of the home. That is key.
This ratio will also determine whether you have to pay private mortgage insurance every month. For conventional loans, borrowers who want to avoid paying private mortgage insurance should make a down payment of at least 20% of the home value. Federal Housing Administration (FHA) purchase loans will allow you to have a loan-to-value ratio of up to 96.5 percent.
For more answers to your loan questions call your [area] mortgage expert, [name], at 602-791-0249 today.
Categorized in: Mortgage