Loan-to-Value vs Loan Purchase Amount

[Michael Aragones]

So I recently posted looking for a lender willing to loan at 80-90 LPA not LTV. I thought to myself why is the default term for loan ratio, LTV , what if you have equity in the deal?

* LPA because buying the property with built in equity means your not loaning based on appraisal value but on purchase price.

[Ned Carey]

Because banks have the money so they get to make the rules. You will not find a lender who will lend on "Value" even if you perceive it to be higher than what you are paying. Even at 80-90% LTV banks are taking a risk if there is an early default.