Dictionary of Banking Terms: high loan-to-value mortgage
high loan-to-value mortgage
second mortgage loan that, when combined with a related first-lien mortgage, substantially exceeds the value of the mortgaged property. High loan-to-value mortgages are used most often in consolidating consumer obligations, such as credit card debt, in one second mortgage. This mortgage loan is known as a 125 percent mortgage loan because the combined loan-to-value ratio of the two loans may be as high as 125% of the property value.
