Home Equity Line Of Credit Equity Requirements

2 Replies

Originally posted by @Brad Tarry :

I understand that there are a few variables at play, but in general, How much equity must you have in your primary residence to qualify for a HELOC?

 Each bank has its own requirements and LTVs. This is how it normally works. 

House value: 100k 

Case 1: 

Mortgage = 80k 

HELOC LTV= 75% ( if your mortgage was less than 75%*100k = 75k you would get the difference between 75k and your current loan as equity- see examples below)

HELOC = 0

Case 2: 

Mortgage = 70k

HELOC LTV = 75% =100k*75% = 75k

HELOC = 75k-70k = 5k

Case 3

Mortgage = 50k

HELOC LTV = 75%

HELOC =75k -50k = 25k

Case 4: 

Mortgage = 0

HELOC = 75% LTV

HELOC = 75k-0= 75k

Does that make sense?