Understanding CLTV can help homeowners qualify for second mortgages by improving their debt-to-home value ratio.

From Yahoo Finance: 2025-01-28 11:46:00

If you own a house, chances are you’ve gained equity as home prices continue to rise. Higher equity can lower your CLTV ratio, making it easier to qualify for a second mortgage. CLTV ratios compare your total debt to your home’s value. If your ratio is too high, lenders may deny your application. Ways to decrease your CLTV include increasing property value, paying down debt, borrowing less, and improving your credit score. Most lenders accept a CLTV ratio of up to 80% or 85%, but lower ratios increase approval chances and offer better rates. Remember, CLTV decreases as you pay down debt or property value rises.



Read more at Yahoo Finance: What is combined loan-to-value ratio (CLTV), and why should homeowners care?