Rockland County Sales Tax Rate Calculator

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Home Equity Loan Calculator

70% 75% 80% 85% 90%
5 Years 10 Years 15 Years 20 Years 30 Years
Please enter valid positive numbers.
Max Borrowing Limit (based on LTV):
Available Equity for Loan:
Monthly Payment (Principal + Interest):
Total Interest Paid:
function calculateHomeEquity() { var homeValue = parseFloat(document.getElementById("homeValue").value); var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value); var ltvLimit = parseFloat(document.getElementById("ltvLimit").value) / 100; var loanAmountReq = parseFloat(document.getElementById("loanAmountReq").value); var interestRate = parseFloat(document.getElementById("interestRate").value); var loanTerm = parseFloat(document.getElementById("loanTerm").value); var errorDiv = document.getElementById("error-msg"); var resultArea = document.getElementById("equity-result-area"); if (isNaN(homeValue) || isNaN(mortgageBalance) || isNaN(loanAmountReq) || isNaN(interestRate) || homeValue <= 0) { errorDiv.style.display = "block"; resultArea.style.display = "none"; return; } errorDiv.style.display = "none"; var maxBorrowingCap = homeValue * ltvLimit; var availableEquity = maxBorrowingCap – mortgageBalance; if (availableEquity 0) { monthlyPayment = loanAmountReq * (monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); } else { monthlyPayment = loanAmountReq / numberOfPayments; } var totalPaid = monthlyPayment * numberOfPayments; var totalInterest = totalPaid – loanAmountReq; document.getElementById("resMaxLimit").innerText = "$" + maxBorrowingCap.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resAvailEquity").innerText = "$" + availableEquity.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resMonthly").innerText = "$" + monthlyPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById("resTotalInterest").innerText = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultArea.style.display = "block"; }

Understanding Your Home Equity Loan Options

A home equity loan, often referred to as a "second mortgage," allows you to borrow against the value of your home. Unlike a HELOC (Home Equity Line of Credit), a home equity loan provides a lump sum of cash that you repay over a fixed term with a fixed interest rate. This makes it an ideal choice for large, one-time expenses like home renovations, debt consolidation, or major medical bills.

How Home Equity is Calculated

To determine how much you can borrow, lenders look at your Loan-to-Value (LTV) ratio. Most lenders will allow you to borrow up to 80% or 85% of your home's total value, minus what you still owe on your primary mortgage.

The basic formula is:

(Home Value × Max LTV %) - Remaining Mortgage Balance = Maximum Available Equity

Example Calculation

Imagine your home is currently valued at $400,000 and you owe $250,000 on your mortgage. If your lender has an 80% LTV limit:

  • 80% of $400,000 = $320,000
  • $320,000 – $250,000 = $70,000 (This is the maximum you could borrow)

Factors That Influence Your Loan

While equity is the primary factor, lenders also consider the following when approving your application:

  • Credit Score: Higher scores typically unlock lower interest rates.
  • Debt-to-Income (DTI) Ratio: Lenders want to ensure you have enough monthly income to cover both your original mortgage and the new equity loan.
  • Appraisal: A professional appraisal will be required to confirm the current market value of your property.

Benefits of a Home Equity Loan

Many homeowners prefer home equity loans over personal loans or credit cards because the interest rates are generally much lower since the loan is secured by your property. Additionally, if the funds are used for "substantial improvements" to the home that secures the loan, the interest paid may be tax-deductible (consult a tax professional for your specific situation).

Common Terms to Know

Fixed Interest Rate: Your rate stays the same throughout the entire life of the loan, protecting you from rising market rates.

Amortization: The process of paying off your debt over time through regular payments. Initially, a larger portion of your payment goes toward interest, while later payments apply more to the principal.

CLTV (Combined Loan-to-Value): This is the total of all loans on the property divided by the home's value.

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