Oregon Hard Money Lenders Offer Loan Alternatives to Investors
In real estate investing, a larger down payment means lower monthly payments. The more paid up front can also improve loan terms.
A key metric used to determine loan approval is the loan-to-value (LTV) ratio. What, exactly, is RTV and how does it impact you as a real estate investor?
How to Calculate Loan-to-Value (LTV) Ratio
Loan-to-value ratio measures the size of the loan compared to the property’s value, expressed as a percentage. It’s calculated by dividing the loan amount by the purchase price or appraised value.
For example, if a purchased property is paid off and valued at $150,000 and you take out a loan for $75,000, the loan-to-value ratio would be 50%. To look at it another way, you have mortgaged half your property value with equity remaining of 50%.
Lenders use LTV to assess risk. Lower LTV ratios indicate more available equity and typically signal lower risk, which can lead to better loan terms. Higher ratios may come with higher interest rates or stricter requirements.
Lenders generally have a maximum they will loan to. Some will loan as high as 80% of your real estate value (typical of conventional mortgage lenders who expect 20% down payment) while others, such as Gregory M. Russell, will only loan up to 50%.
We Help Oregon Real Estate Investors Find Loan Solutions
Our hard money loans provide alternative funding solutions when conventional loan options aren’t available. If your credit score is challenged and other lenders are balking, but you have a sizable down payment (low LTV) talk to us. As private money lenders with over 30 years’ experience, we take the mystery out of the lending process for Oregon real estate investors and offer fast, convenient equity loan services. Call private money lender Gregory M. Russell today at 1-888-477-0444.