Loan to Value Explained
Another one of those notorious three letter acronyms, this one is usually referred to as LTV.
But once you know that LTV means Loan to Value, what does that actually mean?
It is important to understand what LTV is because it will crop up quite a lot.
LTV simply tells you what percentage of the value of the property the person who is seeking to take out the mortgage is looking to borrow.
As a simple example, imagine you are buying a house. The house is going to cost £100,000. You want to get a mortgage of £60,000. This means that your loan to value, or LTV is 60%.
The maximum LTV that you can get will depend on various factors, including your particular situation and financial and credit history, the property itself, the type of product you are looking for, the lender and of course current market conditions and the amount that you wish to borrow.
Property Articles
We hope you find this mortgage glossary / explanation of mortgage terms useful. You might also be interested in our articles on a range of property related issues, a selection of which are listed below:- Reducing the risk of currency fluctuations when buying property
- Unusual or unique home mortgages
- Buying Old Property
- Advantages of buying commercial property
- Property Gazuming Explained
- Currency brokers and buying property overseas
- Finding Property Prices
- Current account mortgages
- Getting a better deal without remortgaging
- Flexible Mortgage Features
- Finding out about building regulations
- Second home mortgages
- Steps in the Homebuying Process
- Contents Insurance
- Considering Location When Buying
