Your loan-to-value ratio (LTV) describes what you owe on your mortgage as a percentage of the total current value of your property. It’s important to understand your LTV ratio, because it affects the rate and type of new loan you may qualify for.

For example:
Let's say the current appraised value of your home is $200,000. The remaining mortgage balance is $160,000. $160,000 is 80% of $200,000 — so that’s an 80% loan-to-value ratio.

Generally, a lower LTV ratio is better, although we consider many factors when figuring out your refinance options.

• A lower LTV ratio may get you a better rate and can let us know if you have enough equity to get a cash-out refinance.
• A higher LTV ratio means you have less equity in your home, and your refinancing may require Private Mortgage Insurance (PMI).