LTV: Loan To Value Ratio In Commercial Real Estate Loans
The loan-to-value ratio, or LTV, is a measure of the relationship between the loan amount and the value of the commercial real estate (collateral). It is used to measure, or determine risk when financing commercial property or making a commercial mortgage.
The Importance of Debt Yield in Commercial Property Loans
Debt yield is a measure of risk for commercial mortgage lenders. It takes into account the net operating income of a commercial property to determine how quickly the lender could recoup funds in the event of default.
LTPP: Loan To Purchase Price in Commercial Real Estate
LTPP, or loan to purchase price, is a metric that compares the size of the loan to the purchase price of the property. It's similar to loan to value (LTV) ratio, but slightly different, since the purchase price and the value of a property can often be different. However, much like LTV, LTPP is also a good measure of leverage-- the higher the LTTP, the more leverage the borrower/buyer is using.