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What Is 100% LTV And How To Get It

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Real Estate Agent with Private Lending Company NMLS 348714

What's 100 percent LTV


When the loan amount is equivalent to the property value, the LTV is 100 percent.  Also known as no down payment purchase. In practice, it implies that the lender is financing 100% of the house value.

LTV is an abbreviation of Loan to Value, and it is the ratio between the loan amount and the property value. LTV=loan amount / property value.

On a purchase transaction, the land value is equivalent to the purchase price, and if the creditor is ready to lend 100 percent LTV, it implies that the lender will finance the entire purchase price.

VA and United States Department of Agriculture creditors can occasionally lend up 100 percent of the purchase price.

  1. Hard money lenders will give 100 percent of the purchase price but only in these three  situations:

    The home is a fixer, and the buyer plans to fix it and sell it for a much higher price than the price he buys. 
  2. The buyer is supplying an additional property with Lots of equity as additional collateral. When the borrower has quite strong equity in possessions he already owns, the creditors can often lend over 100 percent to pay all costs and the rehabilitation money
  3. The purchase price is much much lower than the true real estate value. (This is rare but can occur )
    In a lot of cases, all three situations are combined to reach a 100 percent LTV loan.



    Fix and Flip 100 percent LTV


The most sought-for 100 percent LTV loans are the 100% Fix N' Flip loans. Lendersa® database promotes hard money lenders who are lending 100% LTV for Fix N' Flip loan transactions along with other circumstances like blanket loans. The conditions for financing high LTV loans on Fix and Flip possessions are:

A. After Repair Value (ARV) should be under 75% LTV
B. The borrower has substantial expertise in buying, fixing, and selling fixers
C. The borrower has good credit
D. The borrower has some"skin in the game." Skin in the game might be part of all the cash required for the rehabilitation or additional equity in another home.
E. The amount of the loan should not exceed the lender's greatest LTC requirements.

When the buyer doesn't own another property to vouch for security, a creditor can still fund 100 percent of the purchase price, providing the buyer can pay for the repair/ rehabilitation costs. The buyer must deposit all or some of the repair money into a fund-controlled escrow. Throughout the repair period, the lender will inspect the rehabilitation progress and also authorize accessibility to release funds in some predetermined repair/construction phases.

 

Who finances 100% of LTV loans?

Only a small percentage of all hard money lenders could arrange hard money loans above 75% LTV. Most of the hard money loans are under 65%.

To find out  the more innovative lenders in your local area, you could search lendersa.com or google 100% lenders near me.