Taking the Mystery Out of Loan–to–Value Ratio

Taking the Mystery Out of Loan–to–Value Ratio

Oregon hard money lenders offer loan alternatives to investors

When it comes to investing in real estate, it’s generally understood that the more you’re able to pay up front, the smaller your loan payments will be.

A calculation known as the loan–to–value (LTV) ratio is key in determining your ability to get approved for a loan. What, exactly, is it?

The ABC’s of College Town Housing Investment

The loan–to–value (LTV) ratio is the percentage that a given mortgage amount represents in relation to the value of the property, or the amount you’re borrowing as a percentage of your property’s appraised value.

For example, if your Oregon real estate is paid off free and clear and is valued at $150,000 and you take out a loan for $75,000, then your loan–to–value ratio would be 50%. Another way to look at it is that you have mortgaged half your property value and have equity remaining of 50%.

Lenders generally have a maximum loan–to–value ratio 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 Work with Oregon Real Estate Investors to Find Easy 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 our Gregory M. Russell team today: 1-888-477-0444.