Home Equity Line of Credit

[Erik Pedersen]

So I bought my 2 fam house in Dec. and have a 221k mortgage on it owner occupied. Since I bought it, I updated both units - (paint, light fixtures, appliances, took out carpet hardwood floors throughout, all the odds and ends) and finished the basement putting in a 2/3 bathroom in as well. - put about 12k into it labor and materials)

If I had to guess, I would say my house in Bayonne would go for around 265k maybe more - housing prices have been going up lately.

Total rent per month is $2200. I had my taxes appealed and will see my taxes go down $2500 in 2014. The rental income completely covers the PITI and I have $90 casflow. After my taxes are lowered I will cashflow $300.

My question is, what kind of HELOC can I get for this house. Does my income matter? My debt/income ratio is ~ .5 What would help me get the highest possible line of credit? Should I shop around? I have a wells fargo mortgage, my bank is PNC. Any experience working with these two companies? Thanks!

[Chris Martin]

Loan at $221K and valuation at $265K means $44K equity. You are at 83% LTV. With a HELOC having 85% CLTV, you could theoretically pull out $4K and if you can find a 90% CLTV you could pull out about $17K. Plugging your numbers in at Wells Fargo results in:

Home Equity loans are only available for $10,000 or more. Home Equity lines of credit are only available for $20,000 or more. Please enter a higher amount and try again.

The higher amount yields:

We're sorry; we are currently unable to provide online rate and payment information for the home equity product you have selected. Call our Home Equity Specialists .... or Apply Online to discuss what product options may be right for you.

Good luck.