Mortgage Loan To Value Calculator

LTV Formula:

\[ LTV = \frac{P}{V} \times 100 \]

Loan To Value Ratio:

Definition: This calculator determines the loan-to-value ratio, which compares the mortgage amount to the appraised value of the property.

Purpose: It helps borrowers and lenders assess the risk of a mortgage loan and determine if private mortgage insurance (PMI) is required.

The calculator uses the formula:

\[ LTV = \frac{P}{V} \times 100 \]

Where:

Explanation: The loan amount is divided by the property value and multiplied by 100 to get a percentage.

Details: Lenders use LTV to assess risk. Lower LTV ratios (below 80%) typically get better interest rates and avoid PMI requirements.

Tips: Enter the loan amount and the appraised property value. Both values must be greater than 0.

Q1: What is a good LTV ratio?
A: Generally, LTV below 80% is considered good, while above 80% may require PMI.

Q2: How does LTV affect my mortgage?
A: Higher LTV ratios typically mean higher interest rates and may require private mortgage insurance.

Q3: Can LTV be more than 100%?
A: Yes, if the loan amount exceeds the property value, but most lenders won't approve such loans.

Q4: How is appraised value determined?
A: By a licensed appraiser who evaluates the property's condition, location, and comparable sales.

Q5: Does this include closing costs?
A: No, this calculates basic LTV. Some loans calculate LTV including closing costs (called LTC).