Loan-to-Value (LTV) in simplest terms is the amount of loan as a percentage of the current market value of your home.  LTV is calculated by dividing your existing home loan amount by the current value of your home.  For example, if you borrow $300,000 and your home is valued at $400,000, your loan to value is 75%. LTV is an important variable banks use when qualifying individuals  for a refinance and it determines whether you will be required to obtain PMI (Private Mortgage Insurance) on a purchase or refinance. 

Last updated on November 16, 2010 by Admin