Self-Cert Loans - Expert Advice

How to Calculate the Loan to Value (LTV)

Mortgage lenders and secured loan lenders will provide funds on a number of factors. One of these factors is the "Loan-To-Value" or LTV of your house. Various factors such as the property type e.g. semi-detached, terraced etc and occupied by the owner or buy-to-let come into play and these will go some way to determining the range of maximun LTVs permitted.

This is how it is done:

1. Using the valuation of the property, we can determine the deposit and required mortgage value required.
   
   Property selling for £150,000 and the buyers have £20,000 for a deposit.
   
   £150,000 - £20,000 = £120,000 (required mortgage amount)
   
   
2. Divide the required mortgage value by the valuation and then convert to a percentage
   
   £120,000 / £150,000 = 0.8 or 80% which is what the LTV would be.

 

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