How much will you get from your credit line from a bank? ACalculator is greatly supportive to find out the extent to which you could realize from a home equity line of credit. The amount is determined based on the appraised value of your property and calculated as the loan-to-value ratio after deducting all the outstanding mortgages and debts that is already secured by the same property. That’s why, less the mortgages and debts you already owe and more the appraised home value you have, the bigger is the expected line of credit.
Appraised value of your home
Appraised value is the value assessed by the creditor as per the market value of your property. If your home is not an old one and is used for a few years only, your property is expected to have a higher appraised value.
Mortgages you owe
The total amount of all the owing mortgages (first mortgage, second mortgages etc.) and debts safeguarded by the same property you are offering for this current line of credit application.
You are not supposed to qualify to get the full appraised value of your property as a credit line. Loan-to-value ratio calculates the percentage amount on the appraised value you can get as loan. Suppose, your home has an appraised value of $250,000. If the lender defines loan-to-value ratio as 70 percent, the line of credit will be $175,000. The credit amount will be found after deducting the outstanding mortgage values from this $175,000.