Mortgage Glossary
Loan to Value
Also called: ltv, loan to value ratio
Definition
The loan amount divided by the property value. A $200,000 loan on a $250,000 home is an 80% LTV.
Why it matters
LTV drives down payment requirements, mortgage insurance, pricing and whether a cash out refinance or HELOC is possible.
Related terms
- Private Mortgage Insurance
- Insurance that protects the lender when a conventional loan is made with less than 20% down. The borrower pays for it, monthly or through pricing adjustments.
- Equity
- The difference between what your home is worth and what you still owe on loans secured by it.
- Cash Out Refinance
- Replacing your existing mortgage with a larger one and receiving the difference in cash at closing, minus closing costs.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
General education only, not financial, legal or tax advice, and not a commitment to lend. Guidelines vary by program and change over time. Manny Oloyede, NMLS #1824463. Ultimate Mortgage Brokers LLC, NMLS #2619461. Licensed in OH | KY | NC | PA | SC | TN | TX. Equal Housing Opportunity.
Want this applied to your actual numbers?
Definitions are the easy part. What matters is how the guideline reads against your income, credit and property.