Information AboutLoan-to-value |
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Loan to Value: Refers to the value of the loan in proportion (usually expressed as a percentage) to the value of any property or asset. Example; a loan for $100,000.00 against a property valued at $200,000.00 is said to have a 50% loan to value (also called LTV). The valuation of property is typically determined by an appraiser, but there is no greater measure of the actual real value of any one property than an agreed price between a willing buyer and a willing seller. When dealing with multiple loans for one subject property Combined Loan to Value (called CLTV) becomes another factor. As HELOCs are typically second trust deeds, their values are measured by LTV and CLTV. Example; a property valued at $200,000.00 already has a loan against it for $100,000.00, and a new HELOC is issued at $20,000.00-- or 10% LTV and 60% CLTV. |
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