If you are in the process of refinancing the mortgage, it is important to understand how loan-to-value mortgage affects your application. Here's what you need to know about your loan-to-value ratio.
The value of your home is an important aspect of your mortgage application. The loan to value ratios lenders use is less than the estimated value of your home and how much to borrow is based on demand. To determine the loan-to-valueRatio, divide the total amount of the loan for the value of your home by a recent evaluation.
Loan-to-Value Ratio
For example, if your house is worth $ 150,000, $ 120,000 and ask the new lender your loan to value ratio is 0.80 or 80%. Mortgage lenders have not approved the guidelines for approving mortgage loans and other traditional lenders typically loan applications with loan-to-value ratio above 80 percent if the lender is willing tomay be approved for a mortgage over 80% loan to value that lenders require private mortgage insurance to qualify.
Mortgage lenders consider a homeowner with a high loan-to-value ratio is more of a risk for the loans. Homeowners who have more equity in their homes, just less likely to default on their mortgages than those who have little or no value. In addition to requiring borrowers with high loan-to-value ratio, a private mortgageInsurance companies, mortgage lenders charge these borrowers higher interest rates because of this increased risk. If you are a homeowner with a high loan-to-value ratio, the lender may require you to pay for a new appraisal before approving your mortgage. If there is more about refinancing a mortgage and avoid common mistakes for a mortgage loan Free guide on the link below.
Mortgage Refinancing: Loan-to-Value Ratio Basics
