Combined Loan-to-Value (CLTV) includes all loans secured by the property not just the first mortgage. This matters when you have multiple liens on the property.
CLTV = (First mortgage balance + second mortgage/HELOC balance) / Property value. Lenders use CLTV for risk assessment on properties with multiple loans.
Example: 50K first mortgage + 0K HELOC on a 00K home = 00K/00K = 75% CLTV. This is within typical lending limits for most programs.
How It Differs From LTV
LTV considers only the first mortgage. CLTV includes all liens. CLTV is always equal to or higher than LTV. For a property with only one loan CLTV equals LTV. With multiple loans CLTV is higher.
Calculation
Formula: (Loan 1 + Loan 2 + ... + Loan N) / Property Value. Example: First mortgage 00K, HELOC 0K, property value 00K. CLTV = 50K/00K = 83.3%. LTV = 00K/00K = 66.7%.
Impact on Qualification
CLTV affects loan pricing and availability. Higher CLTV means higher risk for lenders. Conventional loans typically cap CLTV at 80-90%. FHA allows higher CLTV with multiple loans in some cases.
By Loan Type
Conventional: max CLTV 80-90% with second mortgage. FHA: max CLTV varies. VA: allows second mortgages in certain cases. HELOC lenders consider CLTV when setting credit limits.
When It Matters
CLTV matters most when getting a HELOC or second mortgage adding a home equity loan or refinancing a property with multiple liens. Also important for investment properties with multiple financing sources.
How to Improve
To improve CLTV: pay down your first mortgage before getting a second loan or choose a smaller HELOC limit. A lower CLTV gets you better rates and terms on additional financing.