LTV vs. LTC: What’s the Difference and When Should You Use Each? A Visual Guide by Plethora Financial Solutions

LTV vs. LTC: What’s the Difference and When Should You Use Each?

What Is LTV? (Loan-to-Value)

LTV = Loan Amount ÷ Appraised Property Value

📌 LTV Is Used For:

• 🏢 Purchasing stabilized commercial property
• 💼 Refinancing existing buildings
• 💰 Cash-out refinances
• 🏘️ Long-term rental and investment properties

👤 Best For Borrowers Who:

• Have properties with solid equity
• Need long-term financing
• Are not doing construction or heavy renovations

📈 Typical LTV Ranges:

• Commercial Real Estate: 65–80%
• Investment Properties: 70–80%
• Cash-Out Refi: 60–70%



🏗️ What Is LTC? (Loan-to-Cost)

LTC = Loan Amount ÷ Total Project Cost

📌 LTC Is Used For:

• 🧱 Ground-up construction
• 🔧 Fix-and-flip or value-add
• 🏚️ Heavy rehab projects
• 🛠️ Multifamily or commercial repositioning

👤 Best For Borrowers Who:

• Need financing for both acquisition + renovation
• Want higher leverage on construction costs
• Are using private lenders, bridge lenders, or non-bank programs

📈 Typical LTC Ranges:

• Bridge Loans: 80–90%
• Construction Loans: 75–90%

Value-Add Projects: 80–90%

🔄 How LTC Converts into LTV (After Completion)

When the project is finished, lenders stop using LTC and switch to LTV, based on the new market value.

✔️ Before Construction → Evaluated Using LTC

Loan is based on total project cost.

✔️ After Stabilization → Evaluated Using LTV

Loan is based on the post-construction appraised value.

📊 Graphic: LTC to LTV Conversion Example

Project Cost: $1,000,000
Loan Based on LTC: 85% = $850,000
After-Repair Value: $1,300,000
Refinance Based on LTV (75%): $975,000

Meaning:
🏦 You can refinance, lower payments, or even pull-out equity — because LTV is higher than the original LTC amount.

⚖️ LTV vs. LTC — Side-by-Side Comparison

When to Use LTV

• 🏠 Buying existing property
• 🏦 Refinancing
• 💵 Accessing equity
• ✔️ Long-term loans

When to Use LTC

• 🏗️ New construction
• 🔨 Rehab or flip
• 👷 Value-add projects
• ✔️ Bridge or private loans

🚀 How Plethora Financial Solutions Helps

✔️ If You Need LTV-Based Financing:

• Competitive commercial rates
• Fast closing timelines
• Refinance or acquisition

✔️ If You Need LTC-Based Financing:

• Up to 90% LTC available
• Financing for rehab + construction
• Bridge loans with fast underwriting

✔️ We Also Offer:

• DSCR Loans
• Private & Hard Money
• Alternative funding programs
• Customized real estate funding strategies

📞 Contact Plethora Financial Solutions Today

Let our lending experts structure your financing for maximum leverage.

📧 GChang@PlethoraFinancialSolutions.com
📞 832-521-8887
🌐 www.PlethoraFinancialSolutions.com