ITV

In depth

ITV measures an investor's exposure relative to the property's value, similar to LTV but framed from the buyer's or note investor's perspective. ITV is especially relevant when buying seller-financed notes, where the investor's purchase price of the note is compared to the underlying real estate value. Misconception: ITV is not standardized; different note buyers calculate it differently, often including or excluding accrued interest and arrears. Practically, lower ITV means greater protection if the loan defaults because the property's value cushions losses on resale or foreclosure. Note investors target ITVs of 50 to 70 percent on non-performing notes and 70 to 85 percent on performing notes. Sellers seeking to sell their note in the secondary market should aim for buyer down payments that produce strong ITV ratios.