Interesting HELOC question.....

[Jacob A.]

This is a pretty specific question and hopefully theres a lender out there that can help me out. I'll obviously be talking with a lender here in town about it at some point but here's the scenario. I got a loan from my parents to buy my house in 2010. They are extremely lenient with me on payments as I am just paying interest only and paying principal whenever I can. My questions is this.... how much can I take out with a HELOC? As far as the bank is concerned I own the property free and clear, the deed is in my name and I owe no financial institution any money. However, realistically I only have about 25-30% equity in my home technically because I still owe my parents on the original note. If I explained to the bank that my parents would be willing to not accept payments for a few months would they allow me to take a loan on the full value of the home?