Loan To Cost (LTC)

What Does It Mean?

Loan-To-Cost (LTC) is a measure of how much money the borrower has actually contributed to the project (in terms of the overall project cost) compared to the amount of the loan. LTC is used in conjunction with Loan-To-Value (LTV) to determine the overall risk of a loan. LTC is used extensively in renovation and construction lending where the ending value of the property may be very different from the acquisition cost at closing.

How Is LTC Calculated?

As an example, consider a property purchased for $100,000 with an estimated renovation budget of $50,000. The total cost of the project (acquisition cost plus renovation budget) is $150,000, so a lender that requires a maximum LTC of 90% would loan you no more than $135,000.

$135,000 / $150,000 = 90%

How Does It Affect My Hard Money Loan?

Your LTC will be used in conjunction with LTV to determine how much money you will be allowed to borrow. LTC guidelines help lenders ensure that borrowers have an acceptable amount of "skin in the game" and that the lender isn't taking excessive risk by lending to borrowers with little money to lose. Similarly to LTV, loans with higher LTCs may cost more, both in interest rate and origination points. Loans with higher LTCs are typically riskier transactions for your lender, so your lender may require higher returns in exchange for this risk.

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LYNK Capital is a fast-growing hard money lender offering hard money fix and flip loans, rehab and renovation loans, construction loans, and rental property loans. LYNK Capital is a direct private lender that offers lending solutions to real estate investors, contractors, builders, and developers.

Hard Money Fix and Flip Loans

LYNK Capital is your fix and flip lender. We offer hard money fix and flip loans for real estate investors. Fund your rehab or renovation project quickly with competitive interest rates and origination fees. Faster than bank financing with more flexible loan terms. Purchase and refinance options available.

Hard Money Construction Loans

Hard money new construction loans for builders and developers. Fund your new construction project quickly with competitive interest rates and origination fees. Faster than bank financing with more flexible loan terms. Purchase and refinance options available.

Rental Loans

Single-family rental loans for real estate investors. Borrow up to 80% of your property value. Finance your investment property quickly and easily.

Where Does LYNK Capital Lend?

LYNK Capital makes hard money fix and flip and construction loans in: Alabama, Connecticut, District of Columbia, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Get a hard money loan for your investment property today with our online rate quote and pre-approval.

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