WHAT IS A LOAN TO VALUE (LTV) HOW DOES IT DETERMINE THE SIZE OF MY LOAN?

LTV means Loan To Value. The loan to value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. It is very important aspect. For every loan there is defined LTV limit.

The LTV ratio shows the total amount that is invested by borrowers in their homes. The higher the LTV the less cash homebuyers are required to pay out of their own funds.

So for protecting lender against loss in case of default, higher LTV loans (80% or more) usually require mortgage insurance policy.

Check this link

http://www.mortgagefit.com/predeal-faq/

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