Home Equity FAQs
Q. What is LTV and how do I calculate it?
LTV (Loan to Value) tells you how much equity you have in your property and helps you determine if a home equity loan is right for you, since most equity loans have different rates for different LTV levels. Calculate your LTV by dividing your mortgage balance by your property’s appraised value. For example, if you have a mortgage balance of $100,000 and your house is appraised at $150,000, your LTV ratio is 67%.
Q. What if I do not have an open mortgage on my home?
That means you have 100% equity in your home, which makes you eligible for home equity products and mortgage products. The product you choose depends on your needs and how much you’d like to borrow. To explore your options, contact us
Q. What forms or information do I need to apply?
To process your application, you’ll need to provide:
- Last two years' tax returns.
- Two most recent pay stubs.
- Proof of other income to be considered, such as Social Security, pension, rental income, child support, alimony, etc. (if applicable).
- Documentation of current mortgage balance. If there is not current mortgage, provide your most recent property tax bill.
- Declaration page of your homeowner’s insurance and flood coverage insurance (if applicable)
Q. Is the interest I pay on my home equity loan tax deductible?
The interest portion of your home equity loan may be tax-deductible, similar to the deduction on a first mortgage. Check with your tax adviser for details.
Q. What types of properties qualify for home equity loans?
Single-family dwellings, detached homes, town homes and duplexes can all be used as collateral. At this time, condos and manufactured housing are not eligible for home equity loans.