How is the Loan to Value (LTV) ratio calculated?

The LTV is calculated by dividing the Loan Amount by the lower of the Sales Price or the Appraisal Value as entered on the collateral details. In certain cases, when multiple collateral (properties) are added, the LTV is calculated by dividing the Loan Amount by the sum of the lesser value of the Sales Price or the Appraisal Value of each collateral. In this case, if only one of the Sales Price or Appraisal Value is available for a collateral, that value is used in the calculation.

Note:

Alternatively, you can enter a loan-to-value ratio on the Calculations page by selecting the Override calculated LTV option. The override is entered as a number between 0-9999.999 and is rounded up to a whole number on the document.

For Fannie Mae and Freddie Mac transactions, this value must be truncated to two decimal places and then rounded up to the nearest whole percent when disclosed on such documents as the Uniform Underwriting and Transmittal Summary. While specific rounding requirements do not apply for FHA and Inhouse transactions, the same rounding will be applied when the LTV is disclosed for these transactions as is used for Fannie Mae and Freddie Mac transactions.