# 2809 Understanding LTV and CLTV calculations (Loan-to-Value and Combined Loan-to-Value)

#### LTV

The Loan-to-Value (LTV) is calculated by dividing the loan amount into the Sales Price or Appraised Value, whichever is lower. For refinance loans, it is calculated by dividing the loan amount into the appraised value.

For example:
Sales Price:  \$300,000
Appraised Value:  \$295,000
Loan Amount:  \$236,000

Since the Appraised Value is lower than the Sales Price, the Appraised Value is used to calculate the LTV

Loan Amount /Appraised Value = LTV
236,000/295,000 = 80% LTV

#### CLTV

The Combined Loan-to-Value (CLTV) is calculated by dividing the total of the Loan Amount and any additional subordinate financing into the Sales Price or Appraised Value, whichever is lower, or simply into the appraisal value for refinance loans

For example:
Sales Price:  \$300,000
Appraised Value:  \$295,000
Loan Amount:  \$236,000
Sub Financing:  \$30,000

Since the Appraised Value is lower than the Sales Price, this value is used to calculate the CLTV

Loan Amount + sub financing amount /Sales price = CLTV
236,000 + 30,000 / 295,000 = 90% CLTV.

Note: When more than one mortgage exists for the same property, complete the Sub Financing fields by clicking the Sub Financing button at the bottom of the Borrower Information screen.