The mortgage lender hedges this higher level of risk by making you pay more interest. Not all lenders offer loans at every LTV level. There are two ways to reduce your LTV: saving up a larger deposit or reducing the amount of money you need to borrow. The other option is more brutal: try to find a cheaper home. This might not be the message you want to hear but it might be the sensible option in terms of your finances.
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Therefore, a good loan to value ratio depends on your home buying goals. If your goal is to make a small down payment and buy a home sooner, look for one of these mortgage programs with high LTV allowances:. If your goal is to get the lowest possible interest rate and minimize your overall loan costs, you should aim for a lower LTV. There are a number of loan programs specifically geared toward homeowners with high LTVs.
There are even some programs which ignore loan-to-value altogether. USDA loans are insured by the U. Department of Agriculture. Learn more about USDA financing and how to qualify here. FHA mortgage guidelines require a downpayment of at least 3. Conventional loan s are guaranteed by Fannie Mae or Freddie Mac. Both groups offer 97 percent LTV purchase mortgages, which means you will need to make a downpayment of 3 percent to qualify.
In most other cases, FHA loans are preferred. High-LTV mortgages can be simpler for refinance transactions than they are for purchases. A mortgage broker specialises in finding mortgage lenders who will meet your needs for a mortgage. They do this by providing you with advice and recommending the mortgages most suitable for you. They will then manage completing your mortgage application. This includes tracking cookies. Loan-to-value LTV calculator. Loan-to-value calculator I need to borrow.
Property value. Your loan-to-value is:. Find mortgage deals Buyer type. Ready to discover the best mortgage rates? Choose a mortgage category to suit you and compare providers today.
First time buyer mortgages Moving home mortgages Remortgage. Compare all mortgages. What is loan to value? How to calculate loan to value Your LTV is calculated by dividing the value of the mortgage you need by the value of your property or the one you want to buy. Compare All Mortgages. Does loan to value affect mortgage interest rates? Should I speak to a mortgage broker? Speak to an award-winning mortgage broker today.
Advertisement Call Mortgage Advice Bureau today on or request a callback Talk with a member of our mortgage team over the telephone and get advice on which mortgage is right for you. How to influence your loan to value Keeping your loan-to-value as low as possible is key — particularly if you're approaching the point where you need to remortgage.
There are two ways you can influence your loan-to-value: Repaying your mortgage The smaller mortgage you have, the better. Maintaining and increasing the value of your property By keeping your house 'in order' well decorated, maintained, etc.
Is a high loan-to-value good or bad? What is a good loan-to-value ratio? What is the maximum loan-to-value? What next? Find the best mortgage deal for you today — speak to an adviser Unlock cash in your home — look at your options with our Equity Release Service. Get our weekly newsletter Weekend Moneyfacts is available free by email to all Moneyfacts. Sign up.
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