LOAN TO VALUE (LTV ):

Loan Amount divided by the Sales Price/Appraised Value. 

Example:  Home Value = $100,000

                 Loan Amount = $90,000

                 LTV                =       90%

The loan amount is 90% of the value of the home.

Lenders  will only loan a certain percentage of the value of the home to the applicant.  This percentage will decrease as the loan risk increases.  For example: If the you will occupy the property as a primary residence and it is a 1 family home, the lender will lend up to 95% of the sales price or value.  The lender will loan up to this level because the risk factor is relatively low.  However, if you would like to buy an "Investor " home to rent  out, the lender will only lend 70% of the value. 

Why is this?  Well, simply put, if you are having financial trouble, which mortgage will you pay first?  Yup!  The one that you live in…The primary home.  And, the underwriter knows this. 

The Loan-To-Value  will be the Sales Price or Appraised Value, whichever is lower.

The appraisal  must be no more than 120 days old when submitted to the underwriter.  The appraisal may be re-certified, but if it is over 180 from date of original, the appraisal must be done all over.

Call me for 100% LTV on Primary, 2^nd/Vacation AND Investor Home purchase. 

Dan Palumbo  800-817-8743   Ext. #201

 Dan is the published author of the Mortgage Loan Officer Training Manual.  You may order one by visiting www.mortgagetrainingmanual.com

Licensed Mortgage Banker - New Jersey Department of Banking and Insurance; Licensed by the Pennsylvania Department of Banking; Virginia Licensed Mortgage Lender