Combined Loan To Value Ratio - CLTV Ratio

AAA

DEFINITION of 'Combined Loan To Value Ratio - CLTV Ratio'

A ratio used by lenders to determine the risk of default by prospective homebuyers when more than one loan is used. In general, lenders are willing to lend at CLTV ratios of 80% and above to borrowers with a high credit rating.

Combined Loan To Value Ratio (CLTV Ratio)

BREAKING DOWN 'Combined Loan To Value Ratio - CLTV Ratio'

For example, let's assume that an individual is purchasing property valued at $200,000. This individual takes out two loans for the property, one for $100,000 and another for $50,000. The combined loan to value ratio would be 75%, (($100,000 + $50,000) / $200,000).

RELATED TERMS
  1. Debt-To-Income Ratio - DTI

    A personal finance measure that compares an individual's debt ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Mortgage Banker

    A company, individual or institution that originates mortgages. ...
  4. Loan-To-Value Ratio - LTV Ratio

    A lending risk assessment ratio that financial institutions and ...
  5. Total Debt Service Ratio - TDS

    A debt service measure that financial lenders use as a rule of ...
  6. Gross Debt Service Ratio - GDS

    A debt service measure that financial lenders use as a rule of ...
Related Articles
  1. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  2. Budgeting

    Mortgages: How Much Can You Afford?

    Answering this means number-crunching as well as factoring in other considerations and expenses.
  3. Home & Auto

    The Benefits Of Mortgage Repayment

    Buying a home may be the biggest debt you'll ever incur. Learn why you should retire it sooner, rather than later.
  4. Home & Auto

    Looking To Invest In Home Improvements?

    Some home improvement projects could cost you more to complete than they’ll pay out in equity. So, here we show you the worst projects to avoid.
  5. Home & Auto

    Are Home Inspections Worth It? - Price vs. Value

    If you’re wondering whether home inspection is worth the investment, the following information will help you decide.
  6. Home & Auto

    Low-Cost Curb Appeal Projects For Your Front Yard

    Some low-cost improvements to your home's exterior and front yard could increase its curb appeal and ensure a great first impression on buyers.
  7. Home & Auto

    Swimming Pools: Costs Vs. Long-Term Value

    Consider the costs of installing and maintaining a swimming pool, and compare this with the pool's utility and the market value it adds to your home.
  8. Home & Auto

    10 Must-Know Questions To Ask A Home Seller

    To get a sense of what the home you're considering buying is really like, it helps to talk to the seller.
  9. Home & Auto

    7 Ways To Increase Your Home's Appraisal Value

    When it's time to sell your home – or refinance it – it will need to be appraised. Here's how to make sure the valuation is as high as possible.
  10. Home & Auto

    Key Home Upgrades That Make Or Break The Deal

    When making a home purchase, pay attention to key features of the home that either should meet a certain standard or should be upgraded by the seller.
RELATED FAQS
  1. What is a combined loan to value ratio?

    The combined loan to value (CLTV) ratio is a calculation used by mortgage and lending professionals to determine the total ... Read Full Answer >>
  2. What are the advantages of using a home-equity debt consolidation loan?

    When the interest charges from outstanding balances on credit cards and loans start to add up, it is difficult to make any ... Read Full Answer >>
  3. Who are the best-rated home insurance companies in the US?

    Based on consumer surveys, the best company for homeowners insurance in 2014 is Amica Mutual. Present and past insurance ... Read Full Answer >>
  4. How can I tell when a real estate agent might be lying to me?

    Real estate agents are likely to lie or fudge the details about their own credentials, the value and condition of a property ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  2. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  3. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  4. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
  5. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  6. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!