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11th June 2016, 09:54 AM
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Join Date: May 2012
Re: HCLTV Mortgage Definition

Hey The high combined loan to value (HCLTV) is the ratio of all mortgage loan amounts outstanding on a property when the second mortgage is a Line of Credit.

It uses the maximum Line of Credit limit available to be drawn in relation to the property's appraised value (or the selling price, whichever is less

In the HCLTV with a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay $2,500 as a down payment.


How to Calculate of the HCLTV

For first mortgages that have subordinate financing under a HELOC, the lender must calculate the HCLTV ratio.

It is determined by dividing the sum of the items listed below by the lesser of the sales price or appraised value of the property.

The original loan amount of the first mortgage,

The full amount of any HELOCS (whether or not funds have been drawn), and

The unpaid principal balance (upb) of all losed-end subordinate financing.


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