Home Equity Loan Calculator - 5 Steps to Getting a HEL
Home equity loans (HEL) are a great option if your home value is significantly more than your mortgage balance. You can use a HEL for many reasons, including debt consolidation, home improvements, or paying for college.
A combination of rising home values and paying off your mortgage greatly increases your current home equity position. Use Bills.com Home Equity Calculator to find out how much you can borrow and your projected monthly payments.
Home Equity Loan Calculator - 5 Steps
Follow the five steps to calculate your Home Equity Loan options:
- Calculate Your Home Equity: You need to know your mortgage balance and home value.
- Calculate the amount of mortgage you can take: Usually, lenders will go up to an 80-85% LTV.
- Calculate your monthly HEL payment: You need to estimate today's mortgage rates and decide on the loan repayment period.
- Calculate your current monthly payment: Add in your current interest rate and amount of time left to pay. (This payment doesn't include your property taxes and insurance payments).
- Find out your total payments and LTV.
There are three types of mortgage loans that you can use to tap into your home equity.
Cash out Mortgage: If you have a mortgage and want to refinance into a lower rate, or extend the payment period and lower your monthly payments and also take out additional money, then a cash-out mortgage is a great option. One popular reason to take a cash-out mortgage is consolidate your mortgage and credit card debt into one monthly payment.
Home Equity Loan: If you built up equity through paying off your mortgage or rising home prices, you can take out a mortgage (or second mortgage if you already have one). A HEL allows you to tap into you home for many reasons including debt consolidation and home improvements.
Home Equity Line of Credit (HELOC): Do you need money over an extended period of time? Instead of taking a traditional installment payment mortgage, consider an HELOC, which is a revolving line of credit. Similar to a credit card, it allows you to borrow money over time, pay it back, and take out up to your line of credit. A HELOC has variable payments, so you need to budget carefully.
Check out Bills.com Home Equity Loan Option Calculator.
A home equity loan is a special type of mortgage, which allows you to tap into your home’s value to take out cash. There are many reasons to take out a home equity loan including debt consolidation, home improvements, or paying for college.
