Estimate your potential Home Equity Line of Credit amount. This is an estimation tool and not an offer of credit. Consult with Bank of America for precise details.
Estimated HELOC Available:
This is an estimated maximum HELOC amount based on the LTV ratio. Your actual offer may vary.
Understanding Your Home Equity Line of Credit (HELOC)
A Home Equity Line of Credit (HELOC) is a flexible, revolving credit line secured by the equity in your home. Similar to a credit card, you can borrow funds as needed up to a certain limit, repay them, and then borrow again. Bank of America offers HELOCs as a way for homeowners to access funds for various needs, such as home renovations, education expenses, debt consolidation, or major purchases.
How Your HELOC Amount is Calculated
The maximum amount you can borrow through a HELOC is typically determined by a calculation involving your home's value and your existing mortgage balance. Lenders like Bank of America use a metric called the Loan-to-Value (LTV) ratio. Here's a breakdown of the calculation performed by this calculator:
Determine Home Equity: First, the equity in your home is calculated. This is the difference between your home's current estimated market value and the total amount you owe on your primary mortgage.
Home Equity = Current Estimated Home Value - Remaining Balance on First Mortgage
Calculate Maximum Secured Loan Amount: Lenders set a maximum LTV ratio they are comfortable with for combined loans on a property. This ratio represents the total amount of debt secured by your home (your first mortgage plus the HELOC) as a percentage of your home's value. A common maximum LTV for HELOCs is 85%.
Maximum Secured Loan Amount = Current Estimated Home Value * (Desired LTV Ratio / 100)
Calculate Estimated HELOC Availability: The potential HELOC amount is the difference between the maximum secured loan amount and your current first mortgage balance.
Estimated HELOC Available = Maximum Secured Loan Amount - Remaining Balance on First Mortgage
Estimated HELOC Available = $425,000 – $300,000 = $125,000
In this example, the estimated maximum HELOC amount you could potentially access is $125,000. It's important to remember that this calculator provides an estimate. Your actual HELOC offer from Bank of America will depend on a full credit review, underwriting, and appraisal.
Key Considerations for a HELOC
Repayment Terms: HELOCs typically have a draw period (when you can borrow funds) followed by a repayment period (when you must repay the principal and interest).
Interest Rates: HELOC rates are often variable, meaning they can change over time based on market conditions.
Fees: Be aware of potential fees, such as application fees, appraisal fees, and annual fees.
Risk: Since a HELOC is secured by your home, failure to make payments could lead to foreclosure.
For personalized advice and to learn more about Bank of America's HELOC products, it is recommended to visit their official website or speak directly with a financial advisor.
function calculateHeloc() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var remainingMortgage = parseFloat(document.getElementById("remainingMortgage").value);
var loanToValueRatio = parseFloat(document.getElementById("loanToValueRatio").value);
var resultDiv = document.getElementById("result");
var resultValueDiv = document.getElementById("result-value");
if (isNaN(homeValue) || isNaN(remainingMortgage) || isNaN(loanToValueRatio)) {
resultValueDiv.innerHTML = "Please enter valid numbers for all fields.";
resultDiv.style.display = "block";
resultValueDiv.style.color = "#dc3545"; // Red for error
return;
}
if (homeValue <= 0 || remainingMortgage < 0 || loanToValueRatio 100) {
resultValueDiv.innerHTML = "Please enter valid values (e.g., Home Value > 0, LTV between 1-100).";
resultDiv.style.display = "block";
resultValueDiv.style.color = "#dc3545"; // Red for error
return;
}
if (remainingMortgage >= homeValue) {
resultValueDiv.innerHTML = "Remaining mortgage cannot be more than or equal to home value.";
resultDiv.style.display = "block";
resultValueDiv.style.color = "#dc3545"; // Red for error
return;
}
var maxLoanAmount = homeValue * (loanToValueRatio / 100);
var helocAmount = maxLoanAmount – remainingMortgage;
// Ensure HELOC amount is not negative
if (helocAmount < 0) {
helocAmount = 0;
}
resultValueDiv.innerHTML = "$" + helocAmount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
resultDiv.style.display = "block";
resultValueDiv.style.color = "#28a745"; // Green for success
}