| Question: What does L.T.V. mean and what priority | | | | $700,000 by $1,000,000. This puts the L.T.V. at 70%. |
| does it hold to my land loan? | | | | However, some land purchases could be higher than |
| Answer: The term L.T.V. stands for Loan To Value. | | | | what the appraisal will represent as a value. In that |
| This term is very important in determining if you can | | | | case, the L.T.V. will be determined on the appraisal |
| qualify for a land loan. | | | | value. For example, land is purchased at $500,000. |
| L.T.V. represents the amount of loan against the | | | | The appraisal valued the land at $450,000. A down |
| property versus the appraisal value or purchase price. | | | | payment of $100,000 was put down leaving a |
| It is represented in percentage form. For example, | | | | $350,000 land loan. The L.T.V. is then determined by |
| land is purchased for $1,000,000. The actual land loan | | | | dividing the $350,000 by the $450,000 appraisal value |
| amount is $700,000. To find the L.T.V., simply divide | | | | instead of the purchase price of $500,000. This L.T.V. |