Home Equity Calculator

Step-by-Step Guide to Using the Home Equity Calculator

Introduction

This Home Equity Calculator is a valuable tool designed to help you determine your total home equity, the maximum borrowing amount based on your desired loan-to-value (LTV) ratio, and other essential metrics related to your home equity.

Step 1: Enter Your Current Home Value

Field: Current Home Value ($)

Begin by locating the input field labeled Current Home Value ($). Enter the current market value of your home in US Dollars. Note that this field is required, and the value must be between $1,000 and $100,000,000.

Step 2: Enter Your Remaining Mortgage Balance

Field: Remaining Mortgage Balance ($)

Next, find the input field labeled Remaining Mortgage Balance ($) and input the total remaining balance of your current mortgage. This field is also required, with permissible values ranging from $0 to $100,000,000.

Step 3: Enter Your Second Mortgage Balance (Optional)

Field: Second Mortgage Balance ($)

If you have a second mortgage, proceed to the optional input field labeled Second Mortgage Balance ($). Enter the balance of your second mortgage, if applicable, with values allowed from $0 to $100,000,000. If you do not have a second mortgage, you may leave this field blank or enter $0.

Step 4: Choose Your Desired Loan-to-Value Ratio

Field: Desired Loan-to-Value Ratio

Select the desired loan-to-value ratio from the provided options in the dropdown list. Options include:

• 80% (Standard)
• 85%
• 90%
• 95%

This selection is required to calculate the maximum borrowing amount.

Results

After completing the above inputs, the calculator will provide the following results:

• Total Home Equity: Displays your total home equity value, calculated as the current home value minus the remaining mortgage balances.
• Maximum Borrowing Amount: Indicates the maximum amount you can borrow based on your selected LTV ratio. It considers your selected ratio and outstanding mortgage balances.
• Current LTV Ratio: Shows the current loan-to-value ratio of your home, calculated by dividing your total mortgage balances by your home’s current value.
• Equity Percentage: Provides the percentage of your home’s equity relative to its current market value.

Conclusion and Next Steps

Review the results carefully to better understand your current home equity situation and potential borrowing capacity. Use these insights to make informed decisions about leveraging your home equity.