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Loan-to-Value (LTV) Ratio

What is Loan-to-Value (LTV) Ratio?

Loan-to-Value (LTV) Ratio is the amount you owe on your home divided by its current value, usually expressed in a percentage number.

For example, if you owe $150,000, and your homes value is $200,000, your LTV is 0.75, or 75%.

LTV is important when you’re trying to get rid of your Private Mortgage Insurance (PMI) or when you refinance.

How to Get Rid of Your Private Mortgage Insurance

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Calculate home value

If you paid less than 20% down payment on your home purchase, you are most likely paying a monthly Private Mortgage Insurance (PMI). The PMI is an insurance policy that protects the lender — not you. If you default on your mortgage, the lender receives payment from the insurer for the loan given to you. … Read more