How do we estimate your home equity?
We multiply your home's value by the share most programs let you borrow against (currently 80% for a HELOC and 80% for a cash-out refinance), then subtract what you still owe. What's left is a ballpark of the equity you could access. We show the math on purpose: no black boxes.
What's the formula?
Home value × 80% − current mortgage balance = estimated available equity
For example, a $750,000 home with a $300,000 mortgage: $750,000 × 80% = $600,000, minus $300,000 = about $300,000. If the math comes out below zero, we show $0.
Why 80% and not 100%?
Lenders leave a cushion of equity in the home. Most HELOC and cash-out programs cap your total mortgage debt (your first mortgage plus the new money) at around 80% of the home's value. Some programs go higher, depending on credit, income, and the property.
What can change the real number?
- Your home's actual value. We confirm it with an appraisal or a valuation model, which may differ from what you entered.
- Your credit and income. They affect how much you qualify for and the rate.
- Other liens on the home, like an existing HELOC or second mortgage.
- Program limits by state, property type, and loan amount.
- Closing costs that come out of the proceeds. We'll show you every one of them up front.
What about reverse mortgages?
Reverse mortgages use a different formula, based on the youngest borrower's age, current interest rates, and program limits, so we don't estimate them on the slider. Ask us, and we'll run your real numbers.
Estimate only. Not an offer or commitment to lend. Subject to credit approval, property valuation, and program guidelines.