Hard money conference in Las Vegas


LTV - Loan to Value


The ratio of a loan amount against the value of the property being used as collateral. A property valued at $100,000 with a loan request against the asset of $50,000 would have a loan-to-value ratio of 50%.

Loan to value is one of the key risk factors that lenders assess when qualifying borrowers for a mortgage. The risk of default is always at the forefront of lending decisions, and the likelihood of a lender absorbing a loss in the foreclosure process increases as the amount of equity decreases.

Example:

If a borrower wants $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000/$150,000 or 87%.

 


 

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