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How Much Can I Borrow Through A Home Equity Loan?
The allowable limit that has been the established norm, for quite some
time now, is up to 80% of your home's value, which is known as the loan-to-value
ratio (LTV). You arrive at the LTV by dividing the sum that you borrowed
on your home by the current value of the home.
If your property is appraised
at $100,000 and you have a $60,000 mortgage then your LTV is 60%. Further, most
often times it is allowed for the combined value of your first mortgage and
your home equity loan to be 80% of the property's value. Some lenders do allow
higher LTV's, but this will cost more since they pose a greater degree of risk
to the lender.
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