Home Equity Line Calculator

Home Equity Line of Credit (HELOC) Calculator

(Commonly between 75% and 90%)

Calculation Results:

function calculateHeloc() { var currentHomeValue = parseFloat(document.getElementById('currentHomeValue').value); var outstandingMortgageBalance = parseFloat(document.getElementById('outstandingMortgageBalance').value); var lenderMaxHelocLTV = parseFloat(document.getElementById('lenderMaxHelocLTV').value); var resultDiv = document.getElementById('helocResult'); var totalEquityDisplay = document.getElementById('totalHomeEquity'); var maxHelocDisplay = document.getElementById('maxAvailableHeloc'); // Input validation if (isNaN(currentHomeValue) || isNaN(outstandingMortgageBalance) || isNaN(lenderMaxHelocLTV) || currentHomeValue <= 0 || outstandingMortgageBalance < 0 || lenderMaxHelocLTV 100) { resultDiv.style.backgroundColor = '#f8d7da'; resultDiv.style.borderColor = '#f5c6cb'; resultDiv.style.color = '#721c24'; totalEquityDisplay.innerHTML = "; maxHelocDisplay.innerHTML = 'Please enter valid positive numbers for all fields. LTV must be between 1 and 100.'; return; } if (outstandingMortgageBalance >= currentHomeValue) { resultDiv.style.backgroundColor = '#fff3cd'; resultDiv.style.borderColor = '#ffeeba'; resultDiv.style.color = '#856404'; totalEquityDisplay.innerHTML = 'Total Home Equity: $0′; maxHelocDisplay.innerHTML = 'Your outstanding mortgage balance is equal to or greater than your home value. No equity is available for a HELOC.'; return; } var totalHomeEquity = currentHomeValue – outstandingMortgageBalance; var maxLTVAmount = currentHomeValue * (lenderMaxHelocLTV / 100); var maxAvailableHeloc = maxLTVAmount – outstandingMortgageBalance; resultDiv.style.backgroundColor = '#e9f7ee'; resultDiv.style.borderColor = '#d4edda'; resultDiv.style.color = '#155724'; totalEquityDisplay.innerHTML = 'Total Home Equity: $' + totalHomeEquity.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); if (maxAvailableHeloc <= 0) { maxHelocDisplay.innerHTML = 'Maximum Available HELOC: $0Based on your lender\'s LTV, you do not currently qualify for a HELOC.'; maxHelocDisplay.style.color = '#dc3545'; // Red for no availability } else { maxHelocDisplay.innerHTML = 'Maximum Available HELOC: $' + maxAvailableHeloc.toLocaleString('en-US', { minimumFractionDigits: 2, maximumFractionDigits: 2 }); maxHelocDisplay.style.color = '#28a745'; // Green for availability } }

Understanding Your Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit (HELOC) is a revolving line of credit that uses your home as collateral. Unlike a traditional loan where you receive a lump sum, a HELOC allows you to borrow money as needed, up to a certain limit, during a specific draw period. It functions much like a credit card, but with your home's equity backing it.

How Does a HELOC Work?

When you take out a HELOC, the lender approves you for a maximum credit limit based on your home's value and your financial standing. You can then draw funds from this line of credit as you need them, paying interest only on the amount you've borrowed. Payments during the draw period are often interest-only, and once the draw period ends, you typically enter a repayment period where you pay back both principal and interest.

Key Factors Determining Your Available HELOC

Several factors influence how much you can borrow with a HELOC. Our calculator focuses on the primary financial components:

• Current Estimated Home Value: This is the market value of your home. The higher your home's value, the more equity you potentially have.
• Outstanding Mortgage Balance: This is the remaining amount you owe on your primary mortgage. Your equity is essentially your home's value minus this balance.
• Lender's Maximum HELOC LTV (%): LTV stands for Loan-to-Value. Lenders typically won't allow you to borrow against 100% of your home's equity. Instead, they set a maximum combined LTV (including your primary mortgage and the new HELOC) that they are willing to finance. This percentage is usually between 75% and 90%. For example, if a lender has an 85% LTV limit, they will only lend up to 85% of your home's value, minus your existing mortgage.

Calculating Your Available HELOC

The calculation for your maximum available HELOC generally follows these steps:

1. Determine Total Home Equity: Subtract your outstanding mortgage balance from your current home value. This is the total equity you have in your home.
2. Calculate Maximum Allowable Loan Amount: Multiply your current home value by the lender's maximum HELOC LTV percentage (e.g., Home Value * 0.85).
3. Subtract Existing Debt: From the maximum allowable loan amount, subtract your outstanding mortgage balance. The remaining figure is your maximum available HELOC.

If the result is zero or negative, it means that based on the lender's LTV requirements, you do not have enough available equity to qualify for a HELOC at this time.

Example Scenario:

Let's say your home is valued at $400,000, and you have an outstanding mortgage balance of $200,000. Your lender has a maximum HELOC LTV of 85%.

• Total Home Equity: $400,000 – $200,000 = $200,000
• Maximum Allowable Loan Amount (85% LTV): $400,000 * 0.85 = $340,000
• Maximum Available HELOC: $340,000 – $200,000 = $140,000

In this example, you could potentially qualify for a HELOC of up to $140,000.

Using this calculator can help you get an estimate of how much you might be able to borrow, allowing you to plan for home improvements, debt consolidation, or other financial needs.