Glossary · Financing
Loan-to-Value (LTV)
The ratio of a loan amount to the appraised value of the underlying property.
Definition
Loan-to-Value (LTV) is the percentage of a property's value financed by debt. LTV governs how much equity must be left in a deal — it is the single most important constraint on a cash-out refinance, and the primary leverage limit on a hard money or conventional purchase.
Formula
LTV = Loan Amount / Appraised Value
Worked example
A $360,000 loan against a $480,000 ARV refinance = 75% LTV. If the maximum allowed LTV is 70%, only $336,000 can be borrowed — leaving $24,000 of capital trapped in the deal.
How DealIntel uses it
DealIntel models LTV constraints per financing product (hard money typically 65–75% LTC, DSCR 70–80% LTV, conventional 75% LTV cash-out) and shows the trapped-equity figure for every BRRRR scenario so the investor knows up-front how much capital actually recycles.
Related terms
- After Repair Value · ARVThe estimated market value of a property after planned renovations are complete.
- Debt-Service Coverage Ratio Loan · DSCRAn investment property loan qualified on the property's rental income rather than the borrower's W-2 income.
- Hard Money LoanShort-term, asset-collateralized real estate financing from a private lender — fast to close, higher-cost.
- Buy, Rehab, Rent, Refinance, Repeat · BRRRRA long-hold real estate strategy that recycles capital through a cash-out refinance after stabilization.