Saline Real Estate and Homes for Sale

When you apply for a mortgage to purchase your Saline real estate, one of the key factors to your local mortgage lender is the Loan-to-Value ratio for your purchase.  But what does "Loan-to-Value (LTV) Ratio really mean?

In simple terms, the LTV is the percentage of the purchase price for your Saline real estate which is provided by the mortgage (not by your own funds, or any "gift" funds).

The LTV is calculated as:

                                              Mortgage Amount

        Loan-to-Value ratio = -------------------------------------

                                      Appraised Value of the property

The LTV is calculated by your mortgage lender before approving your mortgage.  In general, a high LTV ratio is seen as higher risk.  As a result, with higher risk to the lender, the loan will generally cost you (the borrower) more to borrow.

For example, let's say you're looking to buy a Saline home for $175,000.  You have $10,000 of your own money, and will be getting a gift from your family of $10,000.  All together, you have $20,000 to use as your downpayment.  That leaves $155,000 for your mortgage.  When the house appraises for $175,000 (the purchase price), the LTV is $155,000/$175,000 = 88%.

Given the present state of our mortgage industry, we're headed back to the future.  In the past, the "gold standard" for getting a mortgage was that you needed a 20% downpayment (or conversely, an 80% LTV) in order to get a mortgage.  These days, you can still get a mortgage with less than a 20% downpayment, but you'll pay more for the privilege to borrow the money.

As I've written many times before, nothing can replace the ability to go pound on a desk.  Work with a local lender, and be sure to ask them about the Loan-to-Value for your purchase.

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If you have questions about your specific situation, or if you're considering buying any Saline real estate, you owe it to yourself to take advantage of my experience in the Saline market.  I'd be happy to meet with you!  Just give me a call at (734) 476-2063, or send an e-mail, "Vance (at) SalineMichiganRealEstate (dot) com".

You can search for homes and condos in Saline here.

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