Down Payment Basics Terminology and instructions: LTV-Loan to Value Points 1% of the mortgage amount NOTE: A mortgage will be based on the lower of the sales price or the appraisal. As an Example: Sale price is $60,000. Buyer obtaining a 90% LTV mortgage. $60,00090%=$54,000 mortgage. If bank charges 1 point, then $54,0001%= $540 for points. Please keep in mind that we start with 100%. If a buyer is obtaining a 90% LTV, that means that are getting a loan that is 90% of the total, leaving 10% as the buyer's down payment. So, a buyer obtaining an 85% LTV on a $100,000 property, will have a mortgage of $85,000 and a down payment of $15,000. $100,00085%=$85,000,$100,00015%=$15,000 As a check $85,000+$15,000=$100,000 The bank will make you a 95\% LTV mortgage on a property valued at $110,000, and will charge 2 points. How much cash will you need at closing for the down payment and points? You're paying 30% down on a house you've agreed to purchase for $160,000. What will your mortgage amount be? 10. A property is being purchased for $115,000. The appraisal comes in at $110,000. The bank is charging 2 points and a 1% loan origination fee. How much will the borrower need for the 10% down payment, points and the loan origination fee