| A key part of a mortgage lender's loan guidelines is | | | | The lender will compare loan size to the current |
| how much they are willing to lend in different scenarios. | | | | appraised value of the property. This is the "loan to |
| Lender base their loan analysis of a mortgage | | | | value" ratio. |
| application on many factors, | | | | Lenders usually offer a wide number of different loans, |
| including:incomeassetsproperty typedown | | | | such as 30 year fixed loans, 15 year fixed loans, |
| paymentproperty equityloan type | | | | interest only loans, etc. |
| requestedbankruptcycredit | | | | For each of these types of loans a lender may have |
| One of the most critical areas lenders look at is the | | | | a maximum loan to value (LTV) for different credit |
| equity in a loan. | | | | scenarios. For people with a credit score of over 720 |
| If a person is putting down a large down payment in a | | | | and who can document all of their income the |
| purchase loan then a lender is willing to look on this | | | | maximum loan to value ratio may be 100%. |
| loan more favorably than a similar lender with no down | | | | The maximum loan to value ratio offered by the lender |
| payment or a smaller down payment. | | | | may decrease as the credit and other factors |
| In a refinance mortgage the lender will look at how | | | | decrease. A borrower with an identical property, |
| much equity there is in a property. It will compare the | | | | income, and assets but with a credit mid score of 550 |
| total of:current first loancurrent second loanloan closing | | | | may be eligible for a maximum loan to value ratio of |
| costsadditional cash taken from the property | | | | only 70%. |
| This will be the total size of the new proposed loan. | | | | |