



| MAX LTV (Loan To Value) Loan-to-Value Ratio, or LTV as it is commonly referred to, is the ratio of loan amount to the appraised value (or the sales price, whichever is less) of a property. For example, a loan of $100,000 on a property valued at $200,000 is at an LTV of 50%. The higher the LTV, the more stringent the lenders become on credit and debt ratio. The A borrower can get 100% LTV loan and in some cases more. For the D borrower maximum loan-to-value ratio averages 65-75%. Payment of mortgage loan, or part of it, before due date. Mortgage agreements often restrict the right of prepayment either by limiting the amount that can be prepaid in any one year or charging a penalty for prepayment. Lenders who impose prepayment penalties will charge borrowers a fee if they wish to repay part or all of their loan in advance of the regular schedule. Banks normally impose these penalties to cover the cost of financing or to ensure they have met a reasonable income for their services. Most pre-payment penalties do not exceed 3 years. Hard vs. Soft Pre-Pays A hard pre-pay is defined as a determined period that the borrower cannot refinance or sell the property without penalties. A soft pre-pay is defined as a determined period where the borrower can sell but not refinance. |