What Does Loan-to-Value Mean?

As you begin your home financing journey, you’ll likely hear the phrase “loan-to-value” thrown around. Commonly known as LTV, this is a ratio that divides the amount of money borrowed compared to the sales price of your home or the appraised value, whichever is less. Much like DTI and credit score, your LTV ratio is just another factor your lender will take into consideration when you apply for a mortgage.

How to Calculate Your LTV Ratio

You can calculate your LTV ratio by dividing the amount borrowed by the home’s sales price (or appraised value, whichever is less). For example, if you purchase a home that is $100,000 and you are borrowing $80,000, you would have an 80% LTV.

If you have additional questions on your LTV ratio, reach out to your Pulte Mortgage Loan Consultant!