Home Loans (Taxes and Insurance)

How does LTV based on original value differ from LTV based on a new appraisal?

A LTV based on the original property value takes into consideration your current principal balance compared to the original property value. For example, if your principal balance is currently $89,000 and the original property value was $111,000, then your current LTV based on the original property value is:

Current Principal Balance /
Original Property Value ->
$89,000 / $111,000 = 80.1%

A LTV based on a new appraisal takes into consideration increases in property value that may have been realized since the loan was originated. For example, if your principal balance is currently $89,000 and the home you originally bought for $111,000 has increased in value to $142,000, then your current LTV based on the property's new appraised value is:

Current Principal Balance /
New Appraised Value ->
$89,000 / $142,000 = 62.6%

In order to validate the current property value, a new appraisal obtained at the expense of the borrower must be performed by a Washington Mutual approved appraiser. You will be required to contact Lenders Services, Inc. to schedule an appraisal.

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