The Combined Loan to Value (CLTV) differs from the Loan to Value (LTV) by including all the loans on the property instead of just one primary loan. As discussed in the last post, the LTV is calculated by dividing the loan balance of one loan by the value of the property. The CLTV will add the amounts of all loans on the property and then divide the total by the value of the property.

For example, a property has a value of $800,000 and has two loans on it. The first loan is in the amount of $600,000 and the second loan is for $80,000. The LTV on this property is 75% (600,000 / 800,000) and the CLTV is 85% (680,000 / 800,000).

The lender for the prior example would be concerned with the CLTV on the property even though their money is more secure with the lower LTV of 75%.  They become more hesitant as that CLTV approaches 100%.  Lenders like to see owners with some “skin in the game.”