| Loan type | LTV ratio |
|---|---|
| First mortgage |
N/A%
|
| Second mortgage or HELOC |
N/A%
|
| Third mortgage or HELOC |
N/A%
|
You may be eligible for Refinance. Compare Home Refinance product to lower your Monthly payment.
The Loan-to-Value (LTV) Calculator helps you assess your financial standing by calculating the ratio of your loan amount to your property's appraised value.
First Mortgage LTV Ratio: The LTV ratio for your first mortgage is calculated by dividing the balance of your first mortgage by your home's estimated value. This ratio helps lenders evaluate your risk for the loan.
Second Mortgage LTV Ratio: If you have a second mortgage, this ratio shows the LTV for that loan based on your home?s value.
If LTV ratio is within a reasonable range, you may be eligible to refinance your mortgage. This could help lower your monthly payments or secure better loan terms.
The calculator helps assess your financial position by determining how much of your home?s value is still tied to mortgage loans. Lenders often use LTV ratios to determine eligibility for refinancing, so a lower LTV ratio typically indicates a better opportunity for refinance.
The LTV ratio expresses the relationship between your mortgage loan amount and the property's appraised value or purchase price.
A common guideline is an LTV ratio of 80% or lower, indicating at least 20% equity. Different loan types may have varying requirements.
Yes, certain government-backed loans might allow higher LTV ratios, such as up to 96.5% for FHA and 100% for VA and USDA loans.
It's generally advisable to keep the LTV ratio for a second mortgage below 80% to minimize risk. Some lenders may consider ratios up to 90% in specific cases.
A piggyback loan is a second mortgage to avoid PMI on a primary mortgage. For a piggyback loan, aim for a first mortgage LTV around 80%.
A lower LTV ratio can lead to better loan terms, including lower interest rates, no PMI requirement, and increased borrowing power.
Refinancing can allow higher LTV ratios, with some programs accommodating ratios of up to 97% for conventional loans or more for government-backed loans.
LTV ratios for second mortgages typically range from 80% to 90%, depending on the lender's policies and the type of second mortgage.
Yes, a second mortgage can fund various expenses, such as education, debt consolidation, or major purchases, in addition to home improvements.
A third mortgage adds another layer of borrowing against your property's equity. Acceptable LTV ratios for third mortgages might be below 70%, but they are less common.
An LTV ratio above 80% often triggers the need for Private Mortgage Insurance (PMI) on a conventional loan, but government-backed loans may have different rules.
While some flexibility exists, lenders generally have specific LTV guidelines based on loan programs, risk assessment, and loan-to-value thresholds.
Making extra mortgage payments, home value appreciation, and home improvements can all contribute to lowering your LTV ratio.
LTV ratios for investment properties may be stricter, often requiring higher equity percentages to mitigate the risk associated with non-owner-occupied properties.