If you are shopping for a home loan, you MUST know how to choose your rate and lender. Here’s some great tips on how to get the best possible deal, tailored to fit YOUR needs. Rates at record lows!
There are lots of terms we use in the mortgage industry that aren’t part of everyday parlance. Today, I’ll talk a little bit about “loan-to-value”, or LTV for short.
In fact, I have a video that’s less than 90 seconds long if you’re in a hurry:
So, just to recap what I said in the video, your loan-to-value is the percentage of your home’s value that you finance with your home loan.
Whether you a purchasing a home, or refinancing your existing mortgage, LTV is an extremely important factor in making an educated decision about your home loan.
I’ll give you an example:
FHA – When purchasing a home using an FHA home loan, you can finance up to 96.5% of the appraised value of the property. If you are refinancing, you have two options: “rate & term” or “cash-out”. Rate & term means you are refinancing to lower your rate or change the length of your loan. A rate & term refinance is capped at a 97.75% LTV for FHA. Cash-out FHA refinances are limited to 85 per cent of the value of your home. If your current mortgage is an FHA loan, you can refinance with an FHA streamline, which does not have an LTV limitation.
So your needs define your loan-to-value, which helps define what home loan program you are going to apply for.
If you would like to learn more about loan-to-value, other mortgage terminology, or home loans in Oregon and Washington, I invite you to visit my site or contact me. I am long on answers and short on sales pitches 🙂
Thanks for taking a minute to read this post!
Jason Hillard – homeloanninjas.com
Mortgage Advisor in Oregon and Washington MLO#119032
a div of Pinnacle Capital Mortgage Corp
1706 D St Vancouver, WA 98663
NMLS 81395 WA CL-81395
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- The Home Loan Application, by Jason Hillard , Homeloanninjas.com (oregonrealestateroundtable.com)
- Refinancing your Underwater Fannie Mae home loan (oregonrealestateroundtable.com)
- Real Estate News On The National Scene, by Phil Querin, Q-Law.com (oregonrealestateroundtable.com)
- Fha Home Loans Requirements (themortgagepot.com)
- FHA Clarifies Annual MIP on 15 Year Loans Less Than 78% LTV (fhaloanadvice.com)
- FHA Mortgage Insurance for Kentucky Mortgage Loans (louisvillemortgageguide.com)
- Help for first-time buyers (confused.com)
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