What is Loan-to-Value Ratio (LTV)?
Loan amount divided by home value. Example: $240K loan on $300K home = 80% LTV. Over 80% requires PMI on conventional loans.
Loan-to-value ratio (LTV) is your loan amount divided by the home's appraised value or purchase price (whichever is lower), expressed as a percentage. For example, borrowing $240,000 on a $300,000 home = 80% LTV. Lower LTV means more equity and often better rates. LTV above 80% on conventional loans requires PMI.