A home appraises at $500,000. The first mortgage is $360,000 and a HELOC with a $60,000 line has $15,000 drawn. Using the appraised value as the denominator, what are the first-lien LTV and HCLTV?
Correct Answer
A) LTV is 72% and HCLTV is 84%, on the full $60,000 line available
LTV takes the first lien alone at $360,000 over $500,000, and the high combined figure counts the entire line available at $60,000 rather than the balance drawn. Other choices: counting only the draw is CLTV, not HCLTV; treating LTV as 84% folds the second lien into the first; and 75% and 87% match neither measure. Source: LTV, CLTV and HCLTV definitions
Why This Is the Correct Answer
LTV takes the first lien alone at $360,000 over $500,000, and the high combined figure counts the entire line available at $60,000 rather than the balance drawn. Other choices: counting only the draw is CLTV, not HCLTV; treating LTV as 84% folds the second lien into the first; and 75% and 87% match neither measure. Source: LTV, CLTV and HCLTV definitions
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