{"id":8222,"date":"2019-11-13T20:45:16","date_gmt":"2019-11-14T04:45:16","guid":{"rendered":"https:\/\/financer.com\/?p=8222"},"modified":"2024-11-21T21:27:09","modified_gmt":"2024-11-22T05:27:09","slug":"home-equity-loan-with-low-income","status":"publish","type":"post","link":"https:\/\/financer.com\/loans\/articles\/home-equity-loan-with-low-income\/","title":{"rendered":"Can You Get A Home Equity Loan With Low Income?"},"content":{"rendered":"\n

Getting a home equity loan can be a great way for homeowners<\/a> to pay for both planned and unexpected large expenses, but what if your income is relatively low? Can you still tap into the equity in your home? <\/strong><\/p>\n\n\n\n

Here’s how to get a home equity loan with a low income.<\/strong><\/p>\n\n\n\n

Making the strategic choice to tap into your home equity to pay for home<\/a> improvement projects, consolidate your other debts, or fund higher education expenses for yourself or a child may leave you wondering about qualifying for the loan based on your income. <\/p>\n\n\n\n

Don’t let this hold you back from reaching your financial goals! <\/p>\n\n\n\n

We’ve got tips and advice to help you get a home equity loan with a low income<\/strong>.<\/p>\n\n\n\n

The More Home Equity You Have, the Easier It Is To Borrow<\/h2>\n\n\n\n

Home equity is defined as the difference between the current market value<\/a> of your home and the amount you still owe on your property (if any). <\/p>\n\n\n\n

This unencumbered amount is what’s still available for you to borrow against a home equity loan.<\/p>\n\n\n\n

When you go to take out a mortgage loan<\/a>, lenders will calculate your loan-to-value ratio or LTV. For home equity loans and HELOCs<\/a> that are secondary loans (in addition to your first mortgage, in other words), the lender will calculate your combined loan-to-value ratio or CLTV.<\/p>\n\n\n\n

The combined loan-to-value ratio is calculated by adding up all of your proposed mortgage debt and dividing by the current market value (or current appraised value) of the home.\u00a0<\/strong><\/p>\n\n\n

<\/div>Example<\/strong>: If you owe $250,000 on your home currently and would like to take out a $100,000 home equity line, the total debt would be $350,000 altogether. If your home is worth $500,000, then $350,000 \/ $500,000 = 70% combined loan-t0-value.<\/div>\n\n\n

The lower your CLTV is, the easier it is to qualify for a home equity loan, and the less important your low income might be.<\/p>\n\n\n\n