Home Equity - The Bank of Home Sweet Home


Visitors: 147

With Home Equity loans increasing in popularity as a method for raising money it is important that people understand the bank of home sweet home and what it actually means and how you can work out what you can borrow.

Borrowing against your home depends on how much you have left to pay on your house compared to the value of your property. So with that in mind here is a little sum:

Value of the home - Mortgage left to pay = Amount you can borrow

The value of the home is the current evaluation not what you originally paid for the property so this could work out more or less than what you paid for the property. Let’s take a look at this as an example.

You purchased your house for $250,000 with a down payment of $50,000 and you borrow $200,000 to secure the property as your own. Over the five years you have paid back $22,000 which means you owe $178,000.

You are lucky enough that your home has increased in value by $120,000 and is now valued at $370,000. So we now have the two values that we need in order to work out your Home Equity:

$370,000 - $178,000 = $198,000

So this wraps up our explanation on how to work out how much you can borrow on your Home Equity Loan. Things are not always this cut and dry but this equation is normally pretty close to the mark. You need to make sure that you get an up to date evaluation of your home in order to ensure you have the equity you need.

For more valuable debt relief and free financial planning advice try visiting Online Money Advice located at http://www.onlinemoneyadvice.net where you will quickly and easily find a wealth of information on debt consolidation , credit repair and Home Equity Loans advice that will help you financially and give you peace of mind for the future.


Article Source:

Rate this Article: 
Home Equity Loans for People with Bad Credit - Reasons for Getting a Home ..
Rated 4 / 5
based on 5 votes

Related Articles:

Your Home Can Be Your Piggy Bank -- Home Equity Loans

by: Andrew Baker (August 27, 2006) 
(Finance/Mortgage Refinance)

Hawaii Home Equity Loans - Using a Home Equity Loan to Make Home Improvements

by: J. Hale (November 14, 2006) 
(Real Estate)

Home Equity Lines of Credit - How Soon after Buying a Home Can You Get a Home ..

by: Carrie Reeder (December 21, 2005) 
(Finance/Mortgage Refinance)

Home Equity Line of Credit, Bad Credit Home Equity Loan and Home Equity Mortgage

by: Ken Bissonette (December 18, 2005) 

Equity Home Refinance - Find Right Home Equity Loan Expertise to assist you to ..

by: Johnson Smth (December 19, 2011) 
(Insurance/Home Owners Renters)

Home Equity Credit Update 2007: Both Sides of Declining Home Equity Loan ..

by: Keith Hinkley (February 02, 2007) 
(Real Estate)

Home or Investment Property Equity: Be Sure the Bank Gives You All that You ..

by: Mark Barnes (April 13, 2005) 
(Finance/Mortgage Refinance)

New Hampshire Home Equity Loans – Using a Home Equity Loan to Pay College ..

by: J.A. Hale (November 17, 2006) 
(Real Estate)

West Virginia Home Equity Loans - How Home Equity Loan Payments Work

by: J.A. Hale (November 27, 2006) 
(Real Estate)

Home Equity Loans for People with Bad Credit - Reasons for Getting a Home ..

by: Carrie Reeder (January 04, 2006)