Cannect’s Mortgage Investment Corporation portfolio currently has a weighted average LTV of 54%. Most MICs will hover around the 65% to 75% range. Staying conservative with our LTV is part of how we keep your money safe. That will always be priority #1.
In the realm of finance, the concept of Loan-to-Value (LTV) is a critical metric that influences lending decisions and borrower eligibility. Industry-leading Loan-to-Value ratios can open doors to favorable terms, increased borrowing capacity, and enhanced financial flexibility. In this blog post, we’ll delve into the significance of Industry-Leading Loan-to-Value, its impact on various sectors, and how understanding and optimizing this metric can be a game-changer in achieving your financial goals.
Industry-leading LTVs in real estate financing empower buyers and investors to secure a larger portion of the property’s value as a loan. This can translate to lower down payments and increased opportunities for property acquisition or investment.
Housing prices have been high for a long time. If you are a Cannect investor and real estate prices fall, you can sleep well knowing that Cannect mortgages are not funded unless the borrowers have ample equity in their homes. That is based on conservative valuations and sound exit strategies to escape the loans.
Lenders often view a lower LTV as a lower risk, as it implies a smaller loan relative to the asset’s value. However, industry-leading LTVs are designed to strike a balance, providing borrowers with substantial funding while maintaining a level of risk acceptable to lenders.
Industry-leading LTVs offer borrowers the advantage of securing larger loans with a lower upfront cash requirement. This expanded borrowing capacity can be a catalyst for pursuing significant financial endeavors.
Why try to increase our LTV for more yield? Instead we can continue to focus on what we are good at: finding great borrowers.
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