Avatar's Blog

» Defining Value

Posted on 7/8/2005

If you are purchasing a property, it is important to calculate your loan and cash invetment required in the way that hard money lenders do. Here's what you need to know:

If you are buying a property, the word "value" in LTV, aka the Loan-to-Value ratio, is defined as today's purchase price - it is the amount you are going to pay for the property today. The appraised value of real estate is almost always more than what you will pay for the property. Your loan will be based on what you pay for it today. This is the "street value" of the property - the amount that the property will change hands for today.

 

Posted in Miscellaneous