Financing
LTV (Loan-to-Value)
Loan amount divided by property value. Most cash-out refi lenders cap LTV at 75% for investment properties.
How it's calculated
LTV = Loan Amount ÷ Property ValueExample
A $300,000 loan on a $400,000 property = 75% LTV.
Why LTV (Loan-to-Value) matters
LTV is the lender's risk gauge. Lower LTV = more equity buffer = lower lender risk = better rate for you. Above 75% LTV on investment properties, your options narrow to higher-rate non-QM lenders.
Related terms
Down Payment %
Share of the purchase price you pay in cash. Investment-property lenders typically require 20-25% do…
DSCR (Debt Service Coverage Ratio)
Net Operating Income ÷ mortgage payment. Measures whether the property's income comfortably covers d…
BRRRR
Buy, Rehab, Rent, Refinance, Repeat. A strategy that recycles capital across deals by refinancing ba…