FINANCE CALCULATOR
Ltv Combined
A precise tool.
What is the Ltv Combined & How does it work?
The Combined LTV (Loan-to-Value) ratio is a crucial metric in refinancing scenarios, especially when considering second mortgages. It represents the total amount of debt against the value of the property. A higher LTV ratio indicates a greater risk for the lender.
In refinancing with a second mortgage, the combined LTV is calculated by adding the first mortgage balance to the proposed second mortgage amount and dividing it by the appraised value of the property.
In refinancing with a second mortgage, the combined LTV is calculated by adding the first mortgage balance to the proposed second mortgage amount and dividing it by the appraised value of the property.
LTV_{combined} = frac{Mortgage_1 + Mortgage_2}{Appraised Value}
Mortgage_1 = First mortgage balance
Mortgage_2 = Proposed second mortgage amount
Appraised Value = Current appraised value of the property
Mortgage_2 = Proposed second mortgage amount
Appraised Value = Current appraised value of the property
Parameters
Result
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Frequently Asked Questions
What is Combined LTV in refinancing?
Combined LTV is the total of your first and proposed second mortgage balances divided by your property’s appraised value.
How does a higher Combined LTV affect my loan?
A higher Combined LTV indicates greater risk to the lender, potentially leading to stricter loan terms or denial.
Can I still get a second mortgage if my Combined LTV is high?
Yes, but you may face more stringent requirements or higher interest rates depending on your lender’s policies.
How do I lower my Combined LTV ratio?
You can reduce it by paying down your first mortgage, increasing the appraised value of your property, or choosing a smaller second mortgage amount.
What is the maximum Combined LTV allowed for refinancing?
The maximum typically varies by lender and loan program, but common limits are around 80% to 90%.
How does property value affect my Combined LTV?
A higher appraised property value lowers your Combined LTV, as it increases the denominator in the calculation.
Is there a difference between Combined LTV and individual mortgage LTVs?
Yes, Combined LTV considers both mortgages together, while individual LTVs look at each mortgage separately.
Results are for informational purposes only and do not constitute professional advice.