Home equity line of credit rates and calculators
Q: What are the best home equity interest rates now? Where can I find a calculator for home equity line of credit? How much equity in my home do I need to get a line of credit? Any help is appreciated.
A: Your available equity is based on the value of your property less your outstanding mortgages and other liens. You can borrow only a certain portion of your equity, leaving enough for the lender protection in case you default, and lender initiates foreclosure procedure, auctions the house without loss and hopefully - for the lender, with some gain. Home equity line of credit interest rates are currently the best they have been in a very long time. The lowest are around 3.5%. Try Wells Fargo home equity rate and payment calculator to figure out interest rates and payments for equity line of credit or fixed rate equity loan.
How much equity is needed to get a line of credit depends on the lender. I did some research, you can go as high as 85% in Combined Loan to Value (CLTV) with Bank of America on your primary residence. It looks to be the highest CLTV available today. So, if your house is worth $200,000 and you have $100,000 mortgage, you can still get a line of credit up to $70,000, calculated as
$200,000 x .85 - $100,000 = $70,000.
The CLTV and rate depend on how bad is your credit and may vary by geographical area. I have a feeling that if your score is below 680, the allowable CLTV will be much lower. The best way to see where you at, is to apply on line.
Here is Bank of America current rates for maximum home equity line of credit -
85% CLTV with excellent credit - rate of 5.740%
85% CLTV with good credit - rate of 6.74%
85% CLTV with fair - rate of 7.99%
What Bank of America considers excellent, good or fair, depends on your debt to income ratio and liquid assets, but in general you can't get a line of credit if your credit score falls below 600. The other two home equity line of credit calculators worth checking in my opinion, are at Washington Mutual and Chase. Chase also offers interactive home value estimator which actually works.
Sun Jan 11, 2009 12:01PM by Tony | More in Mortgage | Comments (0)
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