What Is It?
A ratio between the loan amount and the acquisition costs of a property, consisting of the purchase price and rehab costs, if they are being financed.
The LTC ratio is often used by lenders as an indicator of lending risk when underwriting new loans.
A higher LTC ratio may result in a loan denial, higher interest rates or the addition of mortgage insurance.
How Is It Calculated?
You can learn more about the Loan to Cost Ratio on our blog.