The Loan-To-Value Ratio (LTVR) is defined as follows:
Loan-To-Value= Total loan balances (1st mtg+2nd mtg+3rd mtg) / Fair market value of the Claypool home (as determined by appraisal)

Loan-To-Value Ratios seldom exceed 80% because the lender always want some extra protection against default.

The second ratio that lenders use when underwriting a Claypool home loan is the Debt Ratio. The Debt Ratio compares the amount of bills that the borrower must pay each month to the amount of monthly income he or she earns. More precisely, the Debt Ratio is defined as:

Debt Ratio = Monthly Debt Obligations / Monthly Income

Obviously someone whose Debt Ratio is 150% is in trouble. A Debt Ratio of 150% would mean that a borrower's obligations are one and a half times his income. Debt Ratios seldom are allowed to exceed 40% in practice.

The final ratio used in lending is the Debt Service Coverage Ratio (DSCR). The Debt Service Coverage Ratio is a sophisticated ratio only used for large loans on income producing properties in Claypool. It is defined as:

Debt Service Coverage Ratio = Net Operating Income / Debt Service

Net Operating Income is the income from a Claypool rental property after deducting for real estate taxes, fire insurance, repairs, and all other operating expenses; and Debt Service is the mortgage payment on the property. Most lenders insist that this ratio exceed 1.0. A debt service coverage ratio of less than 1.0 would mean that the property did not produce enough net rental income for the owner to make the mortgage payments without supplementing the property from his personal budget.

- Claypool House Values

For any sort of borrowing from us, whether buying, refinancing or selling, you’ll need to determine the value of your Claypool home. Over the course of time, house values change depending on market fluctuations and the specific Claypool neighborhood in which the house is located. Your house might be worth more than what you first paid for it years ago. More often than not, property value goes up, but sometimes it goes down. Whatever the change, we need to determine the new value of any Claypool home before we can lend any money. The first step to figuring out the value of any Claypool home is filling out the form above with any applicable information. Once submitted, one of our knowledgeable representatives will get in touch with you.

- Determining Claypool House Values

Claypool house values can be officially measured by a certified Claypool appraiser through a process known as an appraisal. A certified Claypool appraiser uses standardized methods to determine the value of your prospective home: market conditions, location, lot size and structure size and condition. For more information on Claypool appraisals, click on the Claypool Home Appraisals button on your right. The officially determined price of the home is what all of our home loans are based on. If you would like help figuring out the value of your home, or are interested in one of our home loan programs, please fill out the form above and an experienced representative will contact you.