| If you are in the process of mortgage refinancing, one | | | | to Value ratio means you are more of a risk for the |
| important part of your application approval and the | | | | lender. Lenders pass this additional risk on to you in the |
| interest rate you receive is the Loan-to-Value ratio or | | | | form of higher interest rates and lender fees. If your |
| LTV. Here are the basics of Loan-to-Value ratio and | | | | Loan to Value ratio is greater than 80%, the lender |
| what you need to know to qualify for the best | | | | could require you to purchase Private Mortgage |
| mortgage loan. | | | | Insurance as a condition of approval. |
| What is the Loan to Value Ratio? | | | | Private Mortgage Insurance (PMI) is expensive and |
| Your Loan to Value Ratio is calculated by dividing the | | | | does nothing for you but drive up your cost. PMI only |
| balance of your outstanding mortgage by the | | | | protects the lender from losses due to foreclosure on |
| appraised value of your home. The more equity you | | | | your home. This costly insurance could drive your |
| have in your home when refinancing, the lower your | | | | monthly payments up several hundred dollars and |
| LTV ratio will be. The lower your LTV the better your | | | | negate any benefit you might receive from mortgage |
| mortgage interest rate will be, saving your money with | | | | refinancing. |
| a lower mortgage payment. | | | | You can learn more about your mortgage refinancing |
| Problems with High LTV Ratios | | | | options and how to avoid costly homeowner mistakes |
| If your Loan to Value Ratio is high, you can expect to | | | | by registering for a free mortgage guidebook. |
| pay more for your mortgage loan. Having a high Loan | | | | |