What is the combined costs of all mortgages on a home expressed as a percentage of the home’s value known as?

The combined costs of all mortgages on a home expressed as a percentage of the home’s value is referred to as the Combined Loan to Value Ratio (CLTV). This ratio is a crucial metric in real estate and mortgage lending because it helps lenders assess the risk associated with the mortgage as it demonstrates the relationship between the total debt secured by the property and the property's appraised value.

When calculating the CLTV, total mortgages are summed up and compared to the current market value of the property. A higher CLTV indicates a greater risk for lenders, as it suggests that a borrower has less equity in their home. This impacts loan approval decisions and interest rates, as lenders may impose stricter requirements for higher CLTV ratios to mitigate their risk.

Understanding this ratio is vital for both lenders and borrowers; it influences lending terms and reflects the homeowner's equity stake in the property. For instance, if a homeowner's total mortgage debt is $300,000 on a property valued at $400,000, the CLTV would be 75%, indicating that the homeowner has 25% equity in the property.

The other options encompass different financial metrics unrelated to the specific context of combined mortgage costs to home value. For example, the Debt-to-Income Ratio pertains