Loan-To-Value (LTV): The Key Number Behind Your Loan Options

Your LTV helps determine your loan programs, interest rate, and monthly payment. Generally, the lower your LTV, the more favorable your financing options.

What’s the Deal with Loan-To-Value (LTV)? Your LTV helps determine your loan programs, interest rate, and monthly payment. Generally, the lower your LTV, the more favorable your financing options.

Whether you’re buying or refinancing, your Loan-To-Value (LTV) ratio plays a major role in determining loan approval, available programs, and overall loan cost.

LTV represents the percentage of a home’s value that is financed through the mortgage. Lower LTV ratios typically lead to better loan terms and fewer restrictions, while higher LTV ratios may require mortgage insurance or additional qualifications.

Purchase Loan LTV Guidelines

VA Loans — Up to 100% LTV
Eligible veterans and service members may purchase a home with no down payment and flexible qualification guidelines.

FHA Loans — Up to 96.5% LTV
Requires a minimum 3.5% down payment. FHA loans are accessible to many buyers and can work well for moderate credit profiles.

Conventional Loans — Up to 95% LTV
Down payments can be as low as 3–5%. Mortgage insurance is required when LTV exceeds 80% but may be removed once equity increases.

Jumbo Loans — Up to 90% LTV
Designed for higher loan amounts and typically require stronger credit and larger down payments.

USDA Loans — Up to 100% LTV
Zero down payment financing available for eligible properties in approved rural and suburban areas, subject to income guidelines.

Refinance LTV Guidelines

VA Refinance
Cash-out refinancing may allow up to 100% LTV in certain situations. VA Streamline refinances often do not require an appraisal.

FHA Refinance
Cash-out refinancing available up to 80% LTV. FHA Streamline refinances simplify the process for existing FHA borrowers.

Conventional Refinance
Cash-out refinancing typically allowed up to 80% LTV. Some rate-and-term refinances may qualify for appraisal waivers.

Jumbo Refinance
Cash-out refinancing generally limited to 75% LTV, with stricter qualification requirements.

USDA Refinance
Available for rate-and-term refinances only through USDA Streamline programs.

How LTV Is Calculated

Refinance Example
Home Value: $100,000
Loan Balance: $80,000
LTV: 80%

Purchase Example
Purchase Price: $100,000
Loan Amount: $80,000
LTV: 80%
(LTV is based on the lower of the purchase price or appraised value.)

Have questions? The LenditHome team is here to help you understand your options and confirm the best loan structure for your goals.