Mortgage Loan - Loan to Value Ratio Explained

The loan ratio of the value is an important aspect of your mortgage application. This report concerns the approval status and the interest rate you qualify for. Here's what you need to know about loans to value ratios. The loan to value ratio represents the portion of the house you are financing in the total value of the property. Mortgage lenders have specific guidelines for loans with a value of this relationship. If you are outside the guidelines for the loan of a provider of special value, your mortgage application will be denied. Loan to Value calculation is particularly easy. Simply divide the total amount that you want to borrow to the value of your home. For example, if your home is worth 180,000 $, and applying for a loan of $ 120,000 is divided guides 120,000 $ / $ 180,000 and the loan to value ratio (LTV) is 66 or 66%. The higher the loan to value ratio is less than your equity in your home. Mortgage lenders consider the loan to value ratios of greater risk. If your loan to value ratio exceeds 80% the mortgage lender may require you to purchase Private Mortgage Insurance as a condition for approving your loan. This insurance protects the lender against loss if you default on your mortgage. If you are applying for a mortgage loan with a high ratio of value, expect the lender to charge the customer a higher interest rate for the loan. To avoid the higher interest rates and insurance private guides you should save money for a larger down payment. Use a calculator when shopping for a mortgage to help determine exactly what guides you can afford. For more information on finding the right mortgage for your situation, to register a free guide to mortgage. To get your free mortgage guide Visit RefiAdvisor.com using the link below. Louie Latour specializes in showing homeowners how to avoid common mistakes and predatory mortgage lenders. For a free copy of "Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com. Claim your free guide today at: http://www. refiadvisor.com Chicago Mortgage Refinance