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Combined loan-to-value ratio is a key factor in determining the amount of a home equity loan you may qualify for. To calculate, divide the combined mortgage balance amount by the fair market value of the home. A recent appraisal is generally required to determine fair market value. For example, if you take out a $50,000 home equity loan, and add it to your existing mortgage loan balance of $150,000, your combined balance is $200,000. Divided by the home¡¯s appraised fair market value of $225,00, your CLTV is almost 89%.
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