In a scenario where the combined loan-to-value (CLTV) is 75% and the second mortgage has a balance of $30,000, what is the amount of the first mortgage if the property is valued at $300,000?

To determine the amount of the first mortgage in this scenario, it's important to understand the concept of Combined Loan-to-Value (CLTV), which is a ratio that compares the total amount of all mortgages on a property to its appraised value.

In this case, the property is valued at $300,000 and the CLTV is 75%. Therefore, the total allowable mortgage amount is calculated by multiplying the property value by the CLTV percentage:

Total mortgage amount = Property value x CLTV

Total mortgage amount = $300,000 x 0.75

Total mortgage amount = $225,000

This figure represents the combined amount of the first and second mortgages. The second mortgage has a balance of $30,000, which needs to be subtracted from the total loan amount to find the amount of the first mortgage.

First mortgage amount = Total mortgage amount - Second mortgage amount

First mortgage amount = $225,000 - $30,000

First mortgage amount = $195,000

Thus, the first mortgage amount is correctly calculated to be $195,000, aligning with the answer provided. Understanding the CLTV calculation and how to break it down into individual mortgage components is essential for mortgage loan officers when assessing loan