In the Brokering industry, brokers and agents use the term LTV.
This is a short form of Loan to Value.
Below we show you a simple example of how the loan to value can be calculated with a $100,000.00 Mortgage.
Your Down Payment is the difference. What that means – if your purchase price is $100,000.00 and your down payment is 10% of that $100,000.00 then you are at 90% Loan to Value or (LTV). Your down payment is $10,000.00 respectively.
Loan to Value is very important in today’s mortgage market when it comes to which Borrower Type you are.
LTV is manipulated regarding your ratios. Some lenders want to reduce LTV due to the overall risk on files.
This difference, called your down payment, is seen as Equity In Your Home. The amount of home equity outlines how “leveraged” your home is.
