Learning how to estimate a home’s equity is an essential skill for any homeowner. This is partly because it helps you keep track of your finances, but mostly because housing equity is the first step in successfully applying for her loan.
A home equity loan can be used to pay for home renovations, consolidate high-interest debt, and make the money you’ve already invested in your home work for you.
What is Home Equity?
Equity is the amount of value stored in a home. If you subtract the amount you still owe on your property from the market-appraised valuation, the positive value you’re left with is your home’s equity.
A Home Equity Credit Line (HELOC) if you need money for basically anything, like a kitchen remodel or a quick fix, or if you just need a new car or help with your kids’ school fees.
When Can I Get a Home Equity Loan?
There is no set period of time you must hold your mortgage before applying for a HELOC. Some take out the equity loan in her first month or two after taking out a mortgage, while many others build up their equity gradually over years before even trying to get access.
Every lender has their own set of criteria for home equity borrowers, but in general the following criteria must be met for a successful application:
- Personal credit score 700 or more
- Debt to income ratio of 45{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} or less, preferably less than 30{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c}
- At least 15-25{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} stake in your current property
Home Equity Credit Line Calculator
If you’re not sure if you’re ready to get a HELOC, or if you think you can get approved, but probably want to know what your payment will be, running the numbers online can help. HELOC calculator.
The HELOC Payment Calculator lets you plug in your current home appraisal value, your mortgage balance, the amount you want to borrow, and a rough range of numbers for your credit score.
This is a very easy calculator to use and the results are displayed instantly. Obviously, the answers you get from online calculators are not definitive. We don’t check your credit score or evaluate your home’s financial history to confirm the price.
Interest rates can also fluctuate in the short term, significantly altering the value of the entire loan and the repayment amount. Before signing a loan agreement, be sure to discuss the specific terms of her HELOC with your loan officer.
How to increase your home equity
If the math goes awry because you don’t have enough assets in your home, there are a few things you can do to improve the situation.
You can start by making a large down payment when buying a home. This will start building the stock and he may even qualify for HELOC before the ink on the original loan papers is dry.
Payments can be made on time if possible Minimum payment amount or moreFinally, if you want a reliable way to assess the fairness of your home, make a point of keeping accurate records from the beginning for the life of the loan. It’s readily available when you need to launch your application.
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author: Jen Robin
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