Finding your maximum credit limit works like this:
It's the amount your home is worth x the percentage of home equity you're allowed to borrow - how much you owe on your home
For example:
Let's say your home is worth $300,000 (according to a recent appraisal) and you're allowed to borrow up to 85% of your home equity, but you still have a $100,000 balance on your mortgage.
$300,000 x 0.85 = 255,000
$255,000 - $100,000 = $155,000
In this case, you'd be approved for a $155,000 line of credit
The difference between a home equity line of credit and a home equity loan
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