how much can i qualify for HELOC?

Anonymous · ‎01-28-2022

I'm a first time home owner looking to apply for a HELOC. Its a bit confusing on what i should apply for/what i can get:

Home purchased 11/20/2021 for $490,000

House appraised at purchase for $495,000

We put $25,000 down and paid about $10,000 towards principal since.

Current mortgage balance: 454,054.14

Our neighborhood has sold 8-12 houses since, for well above that value. they are comporable. Zillow and sites like that estimate us at:

Zillow: 605,400

Redfin: 562,000

Homes: 542,512

Realitor: 522,068

I know these are just numbers, more for marketing and dont necessarily reflect what we would appraise at but given the market and what recently sold houses have gone for, id have to think at a minimum our house should be in the 525-550 range. If we were to sell it im sure we could get 600k within a week of showing it.

We have made some improvements. we painted the interior. it was really bad when we bought it. We upgraded the plumbing and electrical which was outdated. and we put in hardwood floors in what was a cement breezeway. We also replaced the kitchen floor, which was old peeling linoleum.

My income is 118,500

My wife: 82, 850

our DTi is around 27% combined

Wifes Fico 8's are 760-800 range

My fico8s are 730-750 range

1) do you think we would qualify for best rates?

2) what could we get with our equity?

GApeachy · ‎01-28-2022

@Anonymous wrote:

We have made some improvements. we painted the interior. it was really bad when we bought it. We upgraded the plumbing and electrical which was outdated. and we put in hardwood floors in what was a cement breezeway. We also replaced the kitchen floor, which was old peeling linoleum.

Was it still a breezeway at the time of your purchase? Or was it dried in already? If not, then the added square footage, depending on size, could add even a little more value compared to your original appraisal. Even if it was already a closed in room, any upgrades will be taken into acct. when FI does their own appraisal and possibly get you more. Just show them all of your upgrades.

I couldn't guess on the amt. you'd qualify for. Hopefully a mortgage specialist will chime in...pretty sure that'll happen.

As far as best rates, our scores line up with yours and over the summer we qualified for and got the best rates. Of course ymmv depending on UW/FI.

Good Luck!

My Take Home Pay Don't Take Me Home

Anonymous · ‎01-28-2022

@GApeachy wrote:
@Anonymous wrote:

We have made some improvements. we painted the interior. it was really bad when we bought it. We upgraded the plumbing and electrical which was outdated. and we put in hardwood floors in what was a cement breezeway. We also replaced the kitchen floor, which was old peeling linoleum.

Was it still a breezeway at the time of your purchase? Or was it dried in already? If not, then the added square footage, depending on size, could add even a little more value compared to your original appraisal. Even if it was already a closed in room, any upgrades will be taken into acct. when FI does their own appraisal and possibly get you more. Just show them all of your upgrades.

I couldn't guess on the amt. you'd qualify for. Hopefully a mortgage specialist will chime in...pretty sure that'll happen.

As far as best rates, our scores line up with yours and over the summer we qualified for and got the best rates. Of course ymmv depending on UW/FI.

Good Luck!

It was already dry just cement floor and was already part of the Sq/Ft of the house

GApeachy · ‎01-28-2022

Stage it real good. Hey, every little bit counts. edit: esp. the plumbing/wiring ...well everything will be taken into consideration.

My Take Home Pay Don't Take Me Home

Anonymous · ‎01-28-2022

They said the appraisal is exterior only due to the pandemic

@GApeachy wrote:
Stage it real good. Hey, every little bit counts.

GApeachy · ‎01-28-2022

@Anonymous wrote:
They said the appraisal is exterior only due to the pandemic
@GApeachy wrote:
Stage it real good. Hey, every little bit counts.

For real?!? Well, take pictures. Show receipts.

My Take Home Pay Don't Take Me Home

GApeachy · ‎01-28-2022

Question:

Is this bank you're wanting to apply for the Heloc with the same bank that did your original home appraisal when you bought the house? If not, I find it odd that they would not demand a whole home appraisal. Ours was in June 2021, I didn't want the Inspector coming inside either and I voiced that because of Covid and basically my LO said tough. She said sit outside. But the Inspector had me do a walk-through anyway to point out everything. Then I sat outside while he continued to take pictures and measure.

My Take Home Pay Don't Take Me Home

dragontears · ‎01-30-2022

the issue is that, unlike mortgages, HELOC are not sold on the open market nor are as regulated.

What that means is that each lender sets their criteria for LTV, APR tiers, appraisal/valuation methods, score model, bureau pulled, etc. There is no universal government mandated rules like mortgages have.

Anonymous · ‎01-31-2022

@dragontears wrote:
the issue is that, unlike mortgages, HELOC are not sold on the open market nor are as regulated.
What that means is that each lender sets their criteria for LTV, APR tiers, appraisal/valuation methods, score model, bureau pulled, etc. There is no universal government mandated rules like mortgages have.

Yeah I get that... but i'm more interested in the amount I can borrow.

Lets assume they allow for 80% of my LTV/equity.

I owe 455K on a home they appraise at 515K. how does that math work out?

is it just = 0.8 X (515-455)

dragontears · ‎01-31-2022

@Anonymous wrote:
@dragontears wrote:
the issue is that, unlike mortgages, HELOC are not sold on the open market nor are as regulated.
What that means is that each lender sets their criteria for LTV, APR tiers, appraisal/valuation methods, score model, bureau pulled, etc. There is no universal government mandated rules like mortgages have.
Yeah I get that... but i'm more interested in the amount I can borrow.

Lets assume they allow for 80% of my LTV/equity.

I owe 455K on a home they appraise at 515K. how does that math work out?

is it just = 0.8 X (515-455)

Ah OK, I understand your question now, thanks for rephrasing it.

Using your numbers the calculation is:

(515 * 0.8) - 455 = max amount at 80% LTV