Understanding Loan To Value Ratio When you are purchasing a home or refinancing your current mortgage, you will come across a term called loan to value ratio (LTV) . It is one of the crucial parameters when it comes to financing. The lenders would look at this parameter as one of the significant qualifying components. Let’s break it down and understand this phenomenon from a lenders perspective. What is a loan to value ratio? LTV is a ratio to know how much money you are borrowing against the collateral. When you are purchasing a home or refinancing it, you will come across the term LTV ratio through your loan officer . Other than your credit score and income, your loan officer will also consider Loan to value ratio to qualify your mortgage. For example: if you are purchasing a home and you are willing to put a 20% down payment , your LTV is 80%. For a typical conventional lo...
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