What does LTV mean and why is it important?

Submitted by Monica McNabb on Thu, 2010-07-22 17:17

LTV stands for Loan-To-Value. For example: If you are putting $20,000 down on a home you are purchasing for $100,000, your LTV = 80/20. Typically, when your LTV is higher than 80/20 (85/15, 90/10), your Lender will charge you an additional premium to compensate for what they perceive to be "risk".

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