CALL: (617) 201-9864
LTV (Loan-to-Value) refers to the ratio between the amount of a loan and the value of the property being used as collateral. In an equity line, the LTV represents the maximum amount that a lender will allow a borrower to borrow against the value of their home.
Here is an example of how to calculate the loan-to-value (LTV) ratio for a home equity line of credit (HELOC):
Suppose the market value of your home is $400,000 and you have a $200,000 mortgage balance on it. Let’s say you find a lender who’s willing to give you a HELOC with 80% LTV. To calculate the equity in your home, multiply your home’s value by 80% and subtract the result from your current mortgage balance:
$400,000 X 80% = $320,000
$320,000 – $200,000 = $120,000
In this scenario, you could potentially get a credit limit of up to $120,000.*
* Disclaimer: For Illustrative purposes only
The LTV ratio for this example is 80%.
The higher the LTV, the more equity the borrower has in the property and the more money they can potentially borrow.
* Our HELOC lender offers up to 95% LTV
Branch Manager | NMLS# 1435896
980 N Federal Hwy, #110,
Boca Raton, FL 33432
Century 21 North East
To Ask a Question or To Schedule a Showing
Copyright © 2020 Danielafonsore - All Rights Reserved.
Powered by GoDaddy Website Builder