Historical Interest Rate Calculator

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Home Equity Loan Calculator

70% (Conservative) 75% (Moderate) 80% (Standard) 85% (Aggressive) 90% (Maximum) Most lenders cap borrowing at 80% to 85% LTV.

Results

Total Home Equity: $0
Max Borrowing Limit (at LTV cap): $0
Estimated Loan Amount Available: $0
function calculateHomeEquity() { var marketValue = parseFloat(document.getElementById('marketValue').value); var mortgageBalance = parseFloat(document.getElementById('mortgageBalance').value); var ltvLimit = parseFloat(document.getElementById('ltvLimit').value); var resultsDiv = document.getElementById('equityResults'); if (isNaN(marketValue) || isNaN(mortgageBalance) || marketValue <= 0) { alert('Please enter valid numerical values for home value and mortgage balance.'); return; } var totalEquity = marketValue – mortgageBalance; var maxBorrowingCapacity = marketValue * (ltvLimit / 100); var loanAvailable = maxBorrowingCapacity – mortgageBalance; if (loanAvailable < 0) { loanAvailable = 0; } document.getElementById('totalEquity').innerText = '$' + totalEquity.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('maxLimit').innerText = '$' + maxBorrowingCapacity.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('loanAmount').innerText = '$' + loanAvailable.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultsDiv.style.display = 'block'; }

How to Use the Home Equity Loan Calculator

Your home is likely your largest asset. A home equity loan allows you to borrow against the value you've built in your property. This calculator helps you determine the maximum amount a lender might allow you to borrow by analyzing your current equity and Loan-to-Value (LTV) ratios.

The Home Equity Calculation Formula

Lenders typically don't let you borrow 100% of your home's value. Instead, they use a combined LTV limit. The formula used in this calculator is:

Available Loan = (Market Value × LTV Limit) – Existing Mortgage Balance

Key Terms to Know

  • Market Value: The current price your home would sell for in the current real estate market.
  • Home Equity: The difference between your home's value and what you still owe on your mortgage.
  • LTV (Loan-to-Value): A ratio used by lenders to express the amount of a first mortgage as a percentage of the total appraised value of real property.
  • Combined Loan-to-Value (CLTV): The ratio of all loans on a property to the value of the property.

Example Scenario

Imagine your home is worth $400,000 and you owe $250,000 on your primary mortgage. If a lender allows an 80% LTV:

  1. Calculate the max total debt: $400,000 × 0.80 = $320,000.
  2. Subtract your current balance: $320,000 – $250,000 = $70,000.
  3. In this case, you could potentially borrow up to $70,000 in a home equity loan.

Factors That Affect Your Loan Amount

While this calculator provides a mathematical estimate, lenders also consider:

  • Credit Score: Higher scores often unlock higher LTV limits and lower interest rates.
  • Debt-to-Income (DTI) Ratio: Lenders want to ensure you have enough monthly income to cover the new loan payment.
  • Appraisal: A professional appraisal will be required to verify the "Market Value" used in the calculation.
  • Employment History: Stable income is crucial for loan approval.
Disclaimer: This calculator is for educational purposes only. It does not constitute a loan offer or guarantee of credit. Closing costs, interest rates, and specific lender policies will vary.

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