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\n <\/div>\n \n A Top Agent Can Help You Find A House You Can Afford<\/h3>\n
We analyze millions of home sales to find buyer’s agents who will show you the right home at the right price. Our service is 100% free, with no catch. Agents don\u2019t pay us to be listed, so you get the best match.<\/p>\n \n
What is a loan-to-value ratio in real estate?<\/h2>\n
The loan-to-value ratio (LTV) is a metric used by lenders to assess the risk of lending to you. In real estate, the LTV compares your requested loan amount to the value of the home you\u2019d like to purchase. It\u2019s calculated by dividing the loan amount by the appraised value of the property.<\/p>\n
If a lender gives you a loan worth 75% of the value of the house, the LTV is 75%. Lenders consider higher LTVs to be riskier because if the loan defaults, their loss would be greater.<\/p>\n
To mitigate this higher risk, lenders will typically charge a higher interest rate on a high LTV loan. Being on the other side of the metric works in your favor. A lower LTV usually leads to a lower interest rate.<\/p>\n
If the LTV is over 80%, most lenders will require you to carry private mortgage insurance<\/a> (PMI) which increases your monthly loan payments.<\/p>\n
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