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Also, another aspect of mortgage refinancing and second mortgages that you should be wary of is the loan to value ratio. On a normal fixed rate mortgage, the loan to value ratio is the purchase price of the home divided by the amount of your home mortgage (loan balance). However, when dealing with second mortgages and mortgage refinancing involving a second, mortgage refinancing lenders go by the combined loan to value ratio (CLTV). This is calculated by taking the amount of the purchase price of the home and dividing it by the loan balance, including both the amount of your first and the amount of your second. Mortgage refinancing lenders typically will only accept CLTVs that are between 70-90% maximum.
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