Most financial institutions will let you borrow as much as 70%-80% of the loan-to-value (LTV) ratio of your home less any outstanding mortgage debt on your property.
Most financial institutions will let you borrow as much as 70%-80% of the loan-to-value (LTV) ratio of your home less any outstanding mortgage debt on your property. There are a variety of home equity loan products available, each with their own terms and conditions. The equity is collateral you can use when borrowing against your home and is calculated as follows:
How Much Credit is Available to You
Calculations
Purchase
Appraised value of your home
$300,000
Borrowing percentage*
80%
Percentage of appraised value
$240,000
Less existing mortgage debt
-$100,000
Potential credit line
$140,000
* Actual percentages may vary depending on the lender and borrowed amount.
When determining your available credit line, the lender may take into consideration other factors including your past credit history, your current income, and your ability to repay a loan. After your credit history has been evaluated, a report will be generated which includes your credit score and lets lenders know which loan is best suited for you.
Maintaining a good FICO score
Your credit score is calculated by the Fair Isaac Corporation (FICO), which accesses the three main credit reporting bureaus (Equifax, TransUnion, and Experian). Credit scores can range from as low as 300 points to as high as 850. People with average credit usually score around 620, good credit at 660, and excellent credit above 720.
You can build and maintain a good credit score by always paying your bills on time, and by keeping a good utilization ratio. This means using less credit than is actually available to you. FICO scores are based on your rating in five general categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and types of credit used (10%) (Source: www.myfico.com). Whether you are new to using credit, or have been a long-time borrower, keeping these categories in mind and maintaining responsible borrowing habits can help you strengthen your credit score. Compare home equity rates.
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.
Conditions… Variable APR of Prime minus 1.01% in all states. Min loan amount $10,000. Max loan amount $200,000. 30-year term. Annual fee waived for the first year. See conditions for guarantee at thirdfederal.com.
Third Federal rate are typically 20% lower than other leaders
Guaranteed Lowest Rate
No closing costs, prepayment penalties, or minimum draw requirements
A Guaranteed Rate HELOC is secured with your home as collateral, whereas personal loans and credit cards are not.
To check the rates and terms you qualify for, we will conduct a soft credit pull that will not affect your credit score. However, if you continue and submit an application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Approval may be granted in five minutes but is ultimately subject to verification of income and employment, as well as verification that your property is in at least average condition with a property condition report. Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing.
Guaranteed Rate Home Equity Line is an open-end product where the full loan amount (minus lender, broker, third party, and governement fees, as applicable) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw.
Apply in 5 minutes, get your money in as fast as 5 days.
The Figure Home Equity Line is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw.
Fastest way to turn home equity into cash
Flexible terms, redraw up to 100%, borrow $20k-$400k
Approval in as little as 5 minutes. Funding in as few as 5 days.
Use to consolidate debt or finance your next home project
Home Equity Lines, Refinance, & Second Mortgages
Unlock your Home’s Equity for Cash
Low Rates: Instant Quote & Credit Approval
Over $100 Billion Funded. 21 Years in Business
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