Reading your loan-to-value result
What loan-to-value actually measures
Combined loan-to-value is the total of all loans secured against your home, your mortgage plus any new home-equity loan, divided by the home's current value. On a $450,000 home with a $280,000 mortgage, adding a $28,000 solar loan brings the combined total to $308,000, which works out to about 68.4% of the home's value, comfortably under a typical 80% cap. HUD's homebuying resources cover general home value and equity considerations worth understanding alongside this math.
Why this only matters for home-equity-secured loans
This calculation is specific to loans that use your home as collateral, like a HELOC or a home equity loan. Most dedicated solar loans are unsecured, meaning they qualify based on credit score and income rather than home equity, so this LTV check simply doesn't apply to them.
What happens if you're close to or over the cap
If adding the solar loan would push your combined LTV above the lender's maximum, you likely won't qualify for that full amount through a home-equity-secured product. Options at that point include requesting a smaller loan amount, waiting for home value appreciation or mortgage paydown to create more room, or switching to an unsecured solar loan instead. The CFPB's HELOC explanation covers how lenders typically apply this cap.
How this compares to an unsecured loan's qualification process
An unsecured loan skips the home equity math entirely and focuses on credit score, income, and debt-to-income ratio. The secured vs unsecured comparison covers that tradeoff, including how rates and qualification differ between the two paths. The cash vs loan savings comparison is worth checking too if you're weighing a third option, cash, against either financed path.
What to bring to a lender conversation
Have your most recent mortgage statement and a reasonable home value estimate ready, since the lender will run their own appraisal or automated valuation as part of underwriting regardless. Getting a rough sense beforehand, using this tool, helps you know what to expect before that formal process begins. The home equity loan vs solar loan comparison can help you weigh this option against a dedicated solar loan once you know your available equity. The combined roof and solar financing tool is also worth checking if a roof project might factor into your equity draw.