Relación de préstamo a valor (LTV): qué es y cómo calcularlo

The loan-to-value (LTV) ratio compares the size of a loan relative to the value of the property being financed. Regardless of what type of loan you apply for, a lender will calculate the LTV ratio as part of the approval process. The maximum LTV ratio varies depending on the loan type and borrower qualifications.

For example, some lenders will go up to a 100% LTV on an automobile loan, while mortgage lenders will usually keep a borrowers LTV at or below 80%. In addition, lenders may offer well-qualified borrowers a higher maximum LTV to reduce the borrowers out-of-pocket cost.

Loan-to-Value (LTV) Formula

Loan-to-value ratio is calculated by using a simple formula:

LTV = Loan amount / Propertys appraised value

  • Loan amount: This is the amount of money borrowed from the lender.
  • Propertys appraised value: The valuation the lender assigns to the financed property. In the case of real estate, this is done by an independent, certified appraiser. In the case of equipment or vehicles, the lender will use valuation tools, such as NADA or Kelley Blue Book , to determine the value.

Once you plug values into the formula and divide the two numbers, the result is expressed as a percentage.

  • Example 1 : If youre purchasing a house valued at $200,000, and you borrow $160,000, the LTV equals $160,000/$200,000, or 80%.
  • Example 2: If you want to borrow $30,000 to buy a car, but the valuation on the car is $25,000, the LTV equals $30,000/$25,000, or 120%. In this case, youll have to put money down to reduce the amount borrowed below the valuation amount.

Why the LTV Ratio Is Important

The loan-to-value ratio is important because it determines the down payment size, loan payment size, interest rate and, potentially, qualification status. Usually, youll want to keep your LTV lower because of the flexibility it gives you, but there are a couple of situations where a higher LTV is preferred.

  • Advantages of a Low LTV
  • Advantages of a Higher LTV
  • Lower interest rates : A low LTV can earn you a better interest rate. Some loans allow high LTV values, such as automobile and equipment loans. However, lenders will raise interest rates as the LTV inches closer to 100%. This is because as the loan amount approaches the appraised value, the risk for the lender increases in the event the borrower defaults and the property has to be repossessed.
  • Known equity : In addition, a low LTV means more built-in equity in the property. This is especially important with real estate, as it might allow the borrower to take out a line of credit against the equity available as long as the combined loan-to-value remains below 80%.
  • Lower payments : A low LTV also means lower payments because the loan amount is smaller. Not only does it help the cash flow of the borrower by keeping payments down, but it also keeps the debt-to-income (DTI) lower and debt service coverage ratio (DSCR) higher, which can help borrowers get other loans in the future.
  • Avoid mortgage insurance : A high LTV not only will result in higher payments for the borrower, but, in mortgage lending, it could end up forcing the borrower to take out private mortgage insurance (PMI) . PMI is an extra monthly charge added to the mortgage payment which remains until the LTV ratio drops below 80%.
  • Able to cover additional costs : A higher loan amount can also allow the business to cover additional costs involved with the purchase, such as furniture for their new office space.
  • Able to invest saved cash : It can also give the borrower more cash to invest elsewhere since they wont need to use it as part of the down payment.
  • Potentially lower down payment: If a lender allows a higher LTV for a loan, the borrower might have to put less money down. For example, if the lender allows a borrower to go up to 90% LTV for an automobile loan instead of 80%, the borrower will have to put 10% less money down.

How To Lower Your LTV Ratio

Because the LTV ratio formula is simple, it is easy to lower your LTV when shopping for a loan. To lower the LTV ratio, you should do one or both of the following:

  • Make a larger down payment: The more money put down at closing, the less youll borrow and the lower your LTV will be. This will result in lower monthly payments and possibly a better interest rate.
  • Look to purchase something more affordable: It could be that what you want is overpriced or is outside of your budget. If you find something more affordable or more correctly valued, itll be easier to get the LTV ratio small enough to be qualified.

What Is Combined Loan-to-Value?

Related to the loan-to-value ratio is the combined loan-to-value ratio. It is the ratio of all loans against a certain property divided by the propertys value. It is the same formula as the LTV, but instead of one loan, it includes all loans on the property.

Combined LTV = Amount of loan A + Amount of loan B / Propertys appraised value

  • Example: Youre looking to take out a $20,000 line of credit against a property that already has a $140,000 mortgage loan on it. The property is valued at $200,000. To calculate combined LTV, you would add $20,000 + $140,000 to get the total loan amount of $160,000. Then divide $160,000 by $200,000 to get an 80% combined LTV.

In addition to LTV, lenders will consider several other ratios when you apply for a loan. Check out our articles on:

  • Debt service coverage ratio (DSCR)
  • Debt-to-income (DTI) ratio
  • Loan-to-cost (LTC) ratio
  • After repair value (ARV )

Bottom Line

When considering a loan application, the lender will calculate the loan-to-value ratio as part of the approval process. By understanding the LTV ratios associated with different types of loans before applying, youll be able to estimate the maximum loan available. This allows you to plan for the down payment thatll be required. The lower the LTV, the lower the monthly payment, and potentially, the lower the interest rate. While it requires more cash down at closing, a lower LTV helps your monthly budget and makes a loan more affordable over time.

What does it mean 90% loan-to-value

What does LTV mean? Your “loan to value ratio” (LTV) compares the size of your mortgage loan to the value of the home. For example: If your home is worth $200,000, and you have a mortgage for $180,000, your LTV ratio is 90% – because the loan makes up 90% of the total price .

How do you calculate 90 loan-to-value

Loan-to-value ratios are easy to calculate: just divide the loan amount by the most current appraised value of the property . For example, if a lender grants you a $180,000 loan on a home that’s appraised at $200,000, you’ll divide $180,000 over $200,000 to get your LTV of 90%.

How do you calculate loan-to-value on a house

Calculating your loan-to-value ratio

  1. Current loan balance ÷ Current appraised value = LTV.
  2. Example: You currently have a loan balance of $140,000 (you can find your loan balance on your monthly loan statement or online account).
  3. $140,000 ÷ $200,000 = .70.
  4. Current combined loan balance ÷ Current appraised value = CLTV.

What is the loan-to-value ratio for a $200000 house with a loan of $160000

To calculate combined LTV, you would add $20,000 + $140,000 to get the total loan amount of $160,000. Then divide $160,000 by $200,000 to get an 80% combined LTV.

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