Many homeowners want to know a number that is answered by the question: How much money can I get with my home equity?
With a HELOC.com line of credit, depending on your credit score and the amount you borrow, you may be able to borrow up to 85% of your home's value, minus what you still owe on your first mortgage. Home equity lines of credit are available for up to $400,000.
This means if you have a $500,000 home with $200,000 owed on your mortgage, you could borrow up to $225,000 using a HELOC.com line of credit.
- $500,000 x 0.85 = $425,000 (85% of the home's value)
- $425,000 - $200,000 = $225,000 (potential line of credit amount)
You can find out exactly how much you can borrow by applying. Approval is available for eligible borrowers in as little as five minutes. You can check your rate without impacting your credit.
This guide shows you how to estimate your own available HELOC amount and what moves it up or down.
What Is Combined Loan-to-Value, and Why Does It Set My HELOC Limit?
The combined loan-to-value ratio, or CLTV, is critical when determining how much you can borrow using a HELOC.com line of credit. It compares the total amount owed against your home to the maximum we can allow you to borrow.
The word "combined" is the part some people miss. Your new line of credit does not get measured by itself when going through approval. It is added to the mortgage you already have, and the two together must fit under the CLTV ceiling for your circumstance.
How Do I Calculate My Borrowing Power?
Here's how to estimate HELOC borrowing power in 3 steps:
- Multiply your home's value by the maximum CLTV. We'll use 85% in this example. A $400,000 home at 85% is $340,000.
- Subtract your current mortgage balance. Use the amount you still owe on your 1st mortgage; for this example, let's say you owe $200,000.
- Determine borrower capacity. $340,000 (85% of home's value) - $200,000 (still owed on a mortgage) = $140,000 potential line of credit amount.
The remaining 15% of your equity remains yours but acts as the lender's cushion, reducing the chances you'll end up in a situation where you owe more than the house is worth.
The more equity you have, the more you may be able to borrow, subject to underwriting requirements. For example, on a $400,000 home with $100,000 owed, you could potentially borrow up to $240,000.
What Is the Most and the Least I Can Borrow With a HELOC?
With HELOC.com, you can borrow a minimum of $25,000 (in most states) and a maximum of $400,000. In Texas, the available minimum is $35,000.
What If I Owe More Than 85% of My Home's Value?
If you currently owe more than 85% of your home's value, you may not have any borrowing capacity. Unfortunately, the loan's CLTV can't exceed the 85% limit. So, if you have a $400,000 home and owe $360,000, you're already over the 85% CLTV limit of $340,000.
You'll need to pay down your mortgage or wait for your property's value to increase before you can borrow with a HELOC.
What If My Home Is Paid Off?
A HELOC.com lien is designed to sit behind an existing first mortgage. If you own your home free and clear, you should explore all your options to find your best and cheapest borrowing solution. Our loan officers can help you understand which borrowing options make the most financial sense.
What Else Affects How Much I Can Borrow?
Your home's value is the biggest factor that affects borrowing limits, but other factors matter as well, including:
- Your credit profile
- The type of property you have
- How you use your home
HELOC.com generally allows you to borrow from single-family homes, townhouses, condos, and two-unit homes. However, the home must be your primary residence.
Estimate Versus Real Offer
Calculating your estimated borrowing power yourself is a good first step. But to get a real offer, a verified home value, your full credit picture, and other underwriting requirements are necessary.
The best way to find out exactly how much you can borrow is to apply with HELOC.com.
We'll check your credit score (with a soft credit pull that doesn't affect your score) and give you a quick answer on your HELOC borrowing limit.
How Do I Find My Real Number?
You can check your rate in as little as five minutes to find out exactly how much you can borrow. A soft credit inquiry is required but won't affect your score, although a hard inquiry is necessary if you choose to move forward with a HELOC.
A HELOC.com line of credit can be funded in as little as five days3, with the average time to receive funds about seven to eight days. Because HELOC.com is the direct lender, the offer you see isn't an estimate — it's the offer you get.
Reach out today to see how much you can borrow and get started putting your equity to work with a low cost HELOC.
