Why LTV matters
Lower LTV generally gives the lender more protective equity in the property.
Loan-to-value
LTV tells you how much of the property value is being borrowed.
Loan-to-value, or LTV, is one of the most important numbers in hard money lending. It compares the loan amount to the property value.
Simple formula
Loan amount divided by property value equals LTV.
If a property is worth $400,000 and the loan is $260,000, the LTV is 65%. That means the loan equals 65% of the property’s value.
Ron says 65% LTV is typical for hard money, though higher LTVs may be considered on a case-by-case basis depending on the property, equity, condition, and exit strategy.
Value matters
Hard money review depends heavily on the property value, current condition, and marketability.
Exit matters too
The loan still needs a practical payoff plan, such as sale, refinance, or project completion.