The loan to value is the amount of money your are borrowing divided by the the value of the property. SO if you are borrowing $80,000 on a home that is worth $100,000, your loan to value would be 80%.
On this week’s Joe Knows Mortgages MINUTE, we answer the question: How does my credit score affect my loan? Most loans have a risk-based pricing model. In other words, the loan is going to be priced according to the risk that the lender takes by making the loan. Through statistics, lenders have realized that loans with lower credit scores ultimately present a higher risk than those with higher credit scores. If you have a higher credit score, you will typically pay less for a loan than someone with a lower credit score.
