| Your loan to value ratio is an important aspect of your | | | | want loan to value ratios that are higher than 80%. If |
| mortgage. This ratio determines how much you can | | | | your loan to value ratio is greater than this amount you |
| borrow when taking out a mortgage or home equity | | | | may have to find a non-traditional lender to refinance |
| loan. Here is what you need to know about your | | | | your mortgage or take out a home equity loan. |
| home's loan to value ratio. | | | | As a homeowner it is best to maintain at least 80% |
| Mortgage lenders look at your home's loan to value | | | | loan to value to protect yourself from economic |
| ratio when approving your loan. Loan to value ratio is a | | | | uncertainty. If you go over 80% loan to value and |
| calculation based on how much you owe and what | | | | property values decline, it is possible to wind up owing |
| the value of your home is. If your home for example, is | | | | more than your home is worth. This can lead to |
| worth $250,000 and you owe $60,000, your loan to | | | | serious problems with your mortgage lender. You can |
| value ratio is 24%. ($60,000/$250,000 * 100 = 24%) | | | | learn more about mortgage loans, including common |
| The lower this percentage is, the more equity you | | | | mistakes many homeowners make, by registering for |
| have in your home. Mortgage lenders typically do not | | | | a free mortgage guidebook. |