If a borrower has an $80,000 first mortgage and a $20,000 second HELOC with $5,000 remaining credit, what is the CLTV if the property appraises for $100,000?

To determine the Combined Loan-To-Value (CLTV) ratio, one must first add the outstanding balances of all loans secured by the property and then divide this total by the appraised value of the property.

In this case, the first mortgage is $80,000, and the second HELOC (Home Equity Line of Credit) is $20,000. It’s important to note that the available credit of $5,000 in the HELOC does not affect the current outstanding balance; thus, the total amount secured by the property remains $100,000 (the total of the first mortgage and the second mortgage).

Next, the appraised value of the property is $100,000. To calculate the CLTV, you take the total loan amounts and divide by the property's value:

CLTV = (First Mortgage + Second HELOC) / Appraised Value

CLTV = ($80,000 + $20,000) / $100,000

CLTV = $100,000 / $100,000

CLTV = 1.0 or 100%

However, the total credit available in the HELOC ($5,000) suggests that you need to consider credit use. If one were to consider only the drawn