What is My House Worth?
Estimate your home’s value so you can tap into your equity
Tapping into your home equity for a home improvement loan, education expenses or medical bills can be one of the best ways to get the extra funds you need. Depending on your needs, you can choose between a fixed-rate home equity loan and a variable-rate home equity line of credit. But, before you can really decide on the best choice, you need a home value estimate to see how much equity you have in your home.
What is my home worth?
The quickest way to estimate home value is to do some simple math. Take your home’s market value and subtract the amount you still owe on your mortgage.
For example, let’s say your home is worth $140,000 and you owe $110,000. In this case, you have $30,000 in equity. You can also use our home improvement loan calculator for these calculations.
However, this isn’t the most exact way to calculate equity. For one thing, you’re guessing your home’s market value, which can fluctuate substantially. When the economy is strong, your home’s value will likely climb. When the housing market falters, though, it’s difficult to know how that will affect your home. So, to get a more accurate figure, get an official assessment.
Have your home professionally appraised
If you’re serious about a home equity loan or line of credit, you’ll get a better picture of your equity if a real estate appraiser does a home value estimate. Appraisers are professionals licensed by your state who will come to your home, examine it and combine their findings with market research to determine what the home is worth today. Appraisals can cost a few hundred dollars. To find an appraiser, you can contact your local Citizens Bank branch to ask for a recommendation or a local real estate office. Continuing our example, you may find your home is actually worth $150,000, meaning you have $40,000 in equity.
Don’t forget your loan to value ratio
Once you’ve determined that you have $40,000 in equity, you may or may not be able to borrow all of that. The loan to value (LTV) ratio dictates how much a lender is willing to lend. Many banks and financial institutions use an LTV of 80%, which means they won’t let you carry debt that is more than 80% of your home’s value. This debt includes your current mortgage as well as the new loan or line of credit.
For example, if your home is worth $150,000 and your bank uses an 80% LTV, you could only have $120,000 in debt. So, in the end, you would be eligible to apply for a $10,000 home equity loan or line of credit.
Apply for a home equity loan or line of credit from Citizens Bank
Now that you know how much your home is worth, you can apply for a home equity line of credit or home equity loan online. The application takes 20 minutes or less. You can also call a Citizens Bank home loan advisor at 1-800-340-LOAN if you have questions about the process or would like to start your application over the phone.
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