<p>Low equity can be determined by the property LTV.</p>

<p>Technically &ndash; The loan-to-value ratio is a metric lenders use to determine their risk of loaning money. The higher the ratio, the higher the risk. It simply is the resulting figure after comparing the market value of the property vs the amount owed against the mortgage. Normally most mortgage loans are considered safe (not at risk) when the loan to value ration is 80% or less. While the ratio is a percentage, LTV is calculated by dividing the original mortgage amount by the current property value.</p>

<p>Of course positive VALUE means EQUITY/PROFIT margin. The sweet spot for Assumable mortgages is NEGATIVE VALUE. Persons with Assumable mortgages are more likely to have an assumption conversation. When shopping for an assumable mortgage, locate a property on your list that does not have any or much equity. These will be properties that have high loan to values (LTV). Anything higher than 85% is a good place to start. High LTV is also referred to as Underwater Mortgages, short sales, negative equity, and some times may even be called distressed properties. It essentially means they owe more than its worth.</p>