06/06/2026
Mortgage Term of the Day:
The Loan-to-Value Ratio compares the loan amount to the appraised value (or purchase price) of a home.
Formula:
Loan Amount รท Home Value = LTV %
๐น Lower LTV = lower risk for lenders
๐น Higher LTV may require mortgage insurance
๐น Staying under 80% LTV helps avoid extra fees
๐ก Example: Buying a $300,000 home with a $240,000 loan = 80% LTV