CLTV
Combined Loan-to-Value — the total of all loans on a property divided by its appraised value.
Definition
Combined Loan-to-Value (CLTV) accounts for all liens against a property, not just the first mortgage. If you have a $600,000 first mortgage and a $100,000 second mortgage on a property worth $1,000,000, your CLTV is 70%. Lenders use CLTV to assess total leverage and exposure risk. Even if the first mortgage LTV is conservative, a high CLTV means the borrower has less skin in the game. Most investment property lenders cap CLTV at 75-80%. CLTV is especially relevant when using subordinate financing, mezzanine debt, or seller carryback notes.
How This Relates to DSCR Loans
DSCR lenders that allow subordinate financing will use CLTV as a pricing factor. Higher CLTV means higher rates and potentially reduced loan amounts.
Related Terms
LTV (Loan-to-Value)
The ratio of a loan amount to the appraised value of the property.
Subordinate Financing
A second or lower-priority loan taken in addition to the primary mortgage.
Equity
The difference between a property's market value and the outstanding mortgage balance.
Lien
A legal claim against a property that must be satisfied before the property can be sold or refinanced.
Compare rates from hundreds of lenders instantly. No personal info required.