The loan-to-value ratio (LTV ratio) is a value that reveals the mortgage amount in comparison to the actual value of the property. It gives an assessment of lending risk for lenders or banks to examine in approving a mortgage. What does this mean? Usually the higher the LTV the higher the risk is to the lender; as a result, it will usually create a higher cost to the buyer, this can take the shape of higher interest rates. Hereâ€™s the logic behind this: with a higher loan-to-value ratio, lenders perceive that there is a greater chance of default in the loan because there is less equity built up within the property.
LTV= (Mortgage Amount)/(Appraised Value of the Property)
Here is an example: if a home is estimated or appraised at $100,000 and the borrower takes on a 65,000 mortgage than the LTV= 65,000/100000= .65 or 65%.
At Refresh Funding we try to be fair to our borrowers and supply up to 70% LTV with fair interest rates.
If you need a fast loan, Refresh Funding can provide Florida-based loans for individuals seeking rehab loans for fix-and-flips. Refresh offers fix-and-flip rates starting at 9.99% for a 12-month term or rental loan rates starting at 7.99% for 36-month terms. We like to think of ourselves as your choice for Private Mortgage Funding & Lending.