what the cltv ratio shows
combined loan to value cltv ratio is a calculation used by mortgage and lending professionals to determine the total percentage of a homeowner s property that has liens debt obligations compared to the value of the property lenders use the cltv ratio along with a handful of other calculations such as the debt to income ratio and the standard loan to value ltv ratio to assess the risk of extending a loan to a borrower many economists consider relaxed cltv standards to be one of the factors that contributed to the foreclosure crisis that plagued the united states during the late 2000s beginning in the 1990s and especially during the early and mid 2000s homebuyers frequently took out second mortgages at the time of purchase in lieu of making down payments lenders eager not to lose these customers business to competitors agreed to such terms despite the increased risk 2before the real estate bubble that expanded from the late 1990s to the mid 2000s the standard practice was for homebuyers to make down payments totaling at least 20 of the purchase price most lenders kept customers within these parameters by capping ltv at 80 