Your Home
Making sense of loan-to-value
by First Financial Bank

Are you considering applying for a Home Equity Line of Credit? It is important to understand the concept of loan-to-value (LTV) and the effect it will have on how much you can borrow. Not sure what a home equity line of credit is? Check out our HELOC 101 blog before you read on!

What is home equity?

Home equity is the current market value of your property minus what you owe on the mortgage. When a home is initially purchased, the bank that issued the loan for the purchase takes a mortgage as collateral against the value of the home, less any down payment. As time progresses and mortgage payments are made, the amount of the mortgage decreases, which results in an increase in equity. To determine the amount of equity you have in your home, simply subtract the remaining amount on your mortgage from the current value of your home. First Financial Bank offers a variety of home equity loan solutions.

What is LTV?

Loan-to-value ratio gives you a percentage of the home loan compared to the appraised value of your home. When you apply for a home equity line of credit First Financial Bank will determine the loan-to-value for your home and upon approval, issue you a line of credit based on your home's equity. The higher the amount of equity you have in your home, the more your home is currently worth, or a mixture of the two will result in larger available lines of credit through a HELOC.

Not sure what your house is worth? Check out Zillow for a quick estimate. 

How does LTV impact me?

Loan-to-value doesn’t have to be an intimidating financial concept. Essentially, LTV will impact the maximum amount you can borrow when applying for a home equity line of credit or home equity loan solution. Check out our HELOC 101 blog for a real-life example of how LTV is calculated. 

Are you ready to apply?

Home equity loan solutions provide the perfect opportunity to consolidate debt, fund your dreams, pay for renovations to your home, and more.

First Financial Bank makes it easier than ever to apply for a home equity line of credit. First Financial Bank currently lends in Ohio, Kentucky, Indiana, and Illinois. If you and the property are in any of those four states, you can start the application for your Home Equity Line of Credit on our website.

First Financial Bank has been helping our clients take another step on the path to success since 1863. You can stay in touch with us on Facebook, LinkedIn, Twitter, and our website


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All loans subject to credit review and approval.