We bought our primary residence here in L.A. 3 years ago and currently have $425K remaining mortgage. Comps are in the low $600s (based on Zillow/Redfin). I was thinking of getting a HELOC for renovations and use the rest for investment. I submitted an online application to BBVA and got an email stating approved amount of $44K, this is before title search and their property value check. Will this approved amount change (hopefully increase) after docs have been submitted and reviewed? With that amount, should I expect a mo. payment of $440 (1% of loan)?
Ideally, I was hoping to get enough from the HELOC to purchase a new primary (in the $700s) and rent the old house. Not with that approved amount though. The only thing we can do is stay in the property and do an out of state investment.
The amount may change, Zillow is often within a considerable level of error
The bank is going to loan you a percentage of that value.
Home Value - $600
Heloc LTV - 80%
loan amount - $480k
1st position morgage - $425k
heloc balance - 55k
these terms are negotiable and the appraisal will vary. Some banks will go up to 95% LTV, which would get you quite a bit more. Those banks tend to do appraisals using internal metrics which are far more conservative to balance.
your estimation of payments is correct I think. I pay 1.5% of the outstanding balance on my heloc but I'm fairly certain 1% is common as well.