HELOC Calculation Misunderstanding

[Brandon Wood]

I'm just getting started in REI and went to my bank today to inquire about opening a HELOC. My bank said they would loan 80% of equity. However, when calculating the lendable equity, she used the formula:

Estimated Home Value - 370,000

Current mortgage balance - 276,000

370,000 x .8 = 296,000

296,000 - 276,000 = 20,000

She said my lendable equity is 20,000.

My understanding is that the calculation should be:

370,000 - 276,000 = 94,000

94,000 x .8 = 75,200

Lendable equity should be 75,200.

Am I missing something?