 TITLE: Understanding Loan-to-Value Ratio (LTV) CONTENT: What Is a Good LTV?\n-------------------\nIf you're taking out a conventional loan to buy a home, an LTV ratio of 80% or less is ideal. Conventional mortgages with LTV ratios greater than 80% typically require PMI, which can add tens of thousands of dollars to your payments over the life of a mortgage loan.\nSome government-backed mortgages allow you to get away with very high LTV ratios. For example, the minimum down payment for a Federal Housing Administration (FHA) loan is 3.5% (LTV ratio of 96.5%). Loans through the U.S. Department of Agriculture and the Department of Veterans Affairs don't require any down payment at all (100% LTV). Those loans typically require a forms of mortgage insurance or include extra fees in the closing costs to offset the risk connected with their higher LTVs.\nLTV ratio is a less crucial factor with auto loans. While you might pay higher interest on a car loan with a higher LTV ratio, there's no threshold comparable to the 80% LTV that earns the best mortgage loan terms. END