How to Determine Available Equity in Your Home
It is good to know how much equity you have in your home if you’d like to apply for a home equity mortgage loan. It may seem pretty simple;
while the amount will be related to the amount you have paid on your mortgage, the home's value also comes into play. There are a few ways
you can ballpark this is you have owned your home for more than a few years. For a more accurate estimate, call us
How to Estimate the Amount of Equity You Have in Your Home
To start, figure out how much of the mortgage you have paid off. You should be able to find this information online or on your last bill. If you cannot find it there, you can always give your lender a quick call to find out. For example, if the original amount of the mortgage was $350,000 and the remaining balance is $200,000, you have $150,000 in home equity.
Next, you will want to try to figure out the current value of your home. This can be a bit more complicated if you have owned your home for more than a few years. The first place you can check for a ballpark estimate is on your property taxes. Your property tax statement should include an estimate of the home's value you are being charged for. The only problem with this is that sometimes properties are not assessed for long periods, or the assessment metrics are outdated. Regardless, it is still a place you can look for a general idea.
Compare to Similar Homes
Another way to get an idea of the value of your home is by visiting some of the major real estate websites. You can look up your property and see an estimate of the current value according to how the property value in the area has changed over the years. Again, this is a ballpark figure, and it's based on current trends, not your actual home. For example, if the roof on your home is caving in, or you put on an addition that included a garage and in-law apartment, the estimate will be incorrect. That said, the estimate can tell you if property values in the area have increased significantly enough for you to hire an assessor to price the property for you.
How Much Can I Borrow with Home Equity Mortgage Loans?
Once you have a basic idea of your home's amount, you can search out a loan and look for the terms. Using home equity mortgage loans, you won't be able to borrow all of the equity you have, but some lenders will allow you to borrow up to 75%. If you currently have $400,000 in equity, you could potentially borrow $300,000 with a home equity mortgage loan.
How do I Find Home Equity Mortgage Loans
When you are looking for a home equity mortgage loan, especially if you have good credit, you will fare the best by shopping around. Make sure you are not short-changing yourself by paying higher rates, fees, or less money than you want. Give BMC Mortgage & Investments a call! You might be surprised with what we have to offer you.