If you are considering applying for a Home Equity Line of Credit, calculating the amount of equity you possess doesn’t require overly complicated math. Write down the current amount owed on your mortgage and the total of other encumbrances. Take that number and subtract it from the fair market value of your property.
If, say, your total home debt tallies $200,000, and the value is estimated at $400,000, you have established 50 percent equity. That $200,000 in equity could be used to support a Home Equity Line of Credit in the neighborhood of $160,000 if the lender is willing to approve at the 90-percent threshold.