Understanding CLTV - How Much Cash Can You Access?

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Posted by Spring EQ on Mar 3, 2022 11:27:38 AM

What is your CLTV? And Why does it matter to Lenders?

The amount of cash you can access from your home is dependent on various lender requirements, with one of the most important being your CLTV, which means "combined loan-to-value" ratio.

Your combined loan-to-value ratio, or CLTV, is the total amount mortgage debt you have on your home expressed as a percentage of your home’s fair market value. This includes all mortgages and liens on your property, and "Fair Market Value" means the price a property would sell for under normal buying conditions in an open and competitive market.

How do lenders decide how much I can borrow?

Calculating your CLTV allows lenders to assess the amount of money they are willing to lend to you without risking potential default or home foreclosure. Generally, many lenders are willing to only lend up to 80% of homeowner’s CLTV, leaving a 20% safety “cushion.” The higher the percentage, the more you can borrow.

At Spring EQ, for instance, we offer homeowners loan options that allow them to offer up to 97.5% of their CLTV—and HELOC loans featuring 10 years of interest-only payments.

No matter the lender, this percentage may be influenced by other factors including your credit score, debt-to-income (DTI) ratio and the type of refinance you choose.

Maximizing Your Cash Out

Understanding your CLTV, along with the equity options available to you, will help you maximize your cash out. If you're ready to explore the process of seeing how much cash you can get from your home, just drop us a line.

Topics: Cashout, mortgage, HomeEquity, CashAccess

*Details to note:
Spring EQ customers get their cash on average in 21 business days, and as fast as 14 days. This average time is measured from the time we receive all requested documents and assumes your stated income, property and title information provided in your loan application matches your documents and any supporting information collected. The time period calculation to get cash is based on the average funding turn times over the first four months of 2023, assumes the funds are wired, excludes weekends and excludes the government mandated disclosure waiting period. Typical applicants are required to provide a current and valid completed application, proof of income, mortgage statement, home hazard insurance, and a photo ID.

Applicants are typically not required to provide proof of assets, and proof of income may be more extensive for self-employed borrowers. Quarterly, we calculate The Spring EQ Cash-In-Pocket Index™ which is the average reduction of our customers debt payments where at least one debt was paid off with loan proceeds. The most recent Cash-In-Pocket Index™ reported a reduction in debt payments of $530.

Any pre-qualification or “Home EQ” value is in no way a pre-approval, indication of eligibility, or binding underwriting decision.

All borrowers will be required to meet Spring EQ's current underwriting guidelines including verifications of applicant’s credit profile, debt-to-income ratio, and home’s current value. Eligible Home Equity Loan borrowers must have a FICO score of 640 or greater and debt-to-income ratio of 50% or less. Refinance transactions may increase total finance charges over the life of the loan. Speak to a loan officer for details. Eligible Home Equity Line of Credit borrowers must have a minimum FICO score of 640 and debt-to-income ratio of 45% or less. Spring EQ offers Home Equity loan options up to 95% of your home value for qualified borrowers with a credit score of 700 or greater excluding second home or investment properties. The maximum Home Equity loan or Home Equity Line of Credit amount Spring EQ offers is $500,000.

For details, call 888-978-9978 to speak to a licensed Spring EQ Loan Officer. Please Note: Any reference to news organizations or outlets and/or their logos or likenesses on these webpages are solely in reference to the inclusion of relevant home equity, mortgage or interest rate subject matter in current, publicly available national news items and cycles and are not meant to imply endorsement of Spring EQ in any way.