• Login
    • Register

Living Room Real EstateLiving Room Real Estate

Denver Residential Real Estate

  • Menu
  • About Living Room
  • Buy
  • Sell
  • Blog
  • ADUs
  • Giving Back
  • Contact Us

Do you have home equity?

Disclaimer: We are not lenders, we are not financial advisors, we are not accountants, we are not attorneys.

Do you have home equity? Wondering how you can use it to your advantage?

So you bought a home a few years ago and have EQUITY! The value has gone up, but how can you use the gain in value to your advantage? Home value is not a liquid asset, but with a tool called a Home Equity Line of Credit (HELOC) you can utilize your equity on your primary residence without selling your home. There are several institutions that offer this type of credit and we’ve done some shopping around for you to help you pick the best program.

We called the top five banks that were recommended for their HELOC programs. We gave all of them the same scenario. The given scenario was: The homeowner’s agent said their house is worth $500K. The owner purchased the home for $400K two years ago and currently has a loan on the property for $380K. Their credit score is 750, income is $60K, debt = $2000/m for mortgage, $250/m car payment, $3000 in credit card debt.

Disclaimer: Rate fluctuate everyday and are based on your personal scenario, the rates below are just estimate for demonstration. Rates were as of July 2019.

The amount of money you can borrow for a HELOC will be calculated by multiplying the current home value by the percentage (typically 80-90%) and subtracting the current loan on the property. EX: $500K (current home value) x .89 (loan to value) = $445K – $380K (loan on home) = $65,000

Here is how we would rank the HELOC programs that we researched.
1. Bellco – 80% at a fixed 3.99%, 80-90% at a fixed 4.49%
2. Red Rocks – 89% at a 5.5% adjustable rate
3. Vectra – 85% at 5.35% to 5% adjustable
4. US Bank – 85% at 6.3%
5. Chase – 80% at 9.38%

Here are some assumptions you can make about most HELOCs…
1. Will have an adjustable rate and will fluctuate with the market rate during the term of the loan. BELLCO is running a special right now on a FIXED RATE HELOC
2. Can only be taken out a your primary residence
3. Payments are typically interest only
4. You will have to pay for an appraisal, closing cost, and it will usually benefit you to open an account at the institution
5. Unlike a second mortgage, a HELOC gives you access the the equity but you don’t have to pull out a lump sum

So now that you know what some local banks are offering, let’s think through a few scenarios on how you could utilize a HELOC. We must mention, HELOCs are NOT bottomless piggy banks to fund affluent lifestyles that you really can’t afford. The frivolous use of HELOCs in part lead to the Great Recession in 2008.

1. Moving Up – Many homeowners utilize the equity they have in their first home to purchase a second home. In Denver’s competitive housing market it can be extremely difficult to purchase a new home with a contingency to sell your current home. Also, many families don’t want to sell their current home without having a replacement home under contract. HELOCs are a solution many buyers are utilizing to avoid this dilemma. You can make an non-contingent offer, use funds from a HELOC as the down payment on your replacement property, and close on your new home THEN list your first home. With the proceeds from the closing of your first home you will have to pay off the first mortgage and HELOC in full. All the banks we spoke with confirmed that a HELOC can be used for anything… including the purchase of another home, but MAKE SURE TO CHECK WITH YOUR LENDER!

2. Home Improvement – Are there aspects of your home that you would like to improve? If so, a HELOC might be a great option for you. A HELOC allows you to borrow against the equity you already have in your home. Allowing you to finance these larger purchases over time instead of in one lump sum. Keep in mind that many of these rates are typically not fixed and payment are interest only, so having an established payment plan that includes a strategy to pay down the principle will be in your best interest. When considering home improvements, be sure to be mindful and discuss your improvement plans with your trusted real estate agent. Your agent can help you navigate what improvements are going to bring the most value back into the home when you sell. Take it from us, there is nothing more discouraging than putting a lot of money into a home that does not increase the value.

3. Consolidating other higher interest loans – Have you evaluated the interest rate on your student loan and credit cards? It can be extremely difficult to pay off high interest loan debt if you interest rate is 19.24% (average credit card interest rate). It might benefit you to use a HELOC to pay off debt with a higher interest rate.

We can help you with any real estate questions including: How much is my house worth? What is the best strategy to buy a second home? What renovation projects give the best return on investment. Call us: 303-720-8491

Posted in: Blog, Homeowner Tips, Insider Information

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Post navigation

« Tax Benefits of Real Estate – Save the Date
Congratulations Mike & Torrey »

Blog

SITE NAVIGATION

  • About Living Room
  • Buy
  • Sell
  • Blog
  • ADUs
  • Giving Back
  • Contact Us

Featured Properties

6594 W Mississippi Way $410,000

6594 W Mississippi Way Lakewood, Colorado

3 Beds 2 Baths 1,595 Sq Ft 0.040 Acres

Sale Type: Active Listing courtesy of Black Crown Real Estate

141 Utica Street $439,900

141 Utica Street Denver, Colorado

4 Beds 2 Baths 1,672 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Highland Property

3200 S Galapago Street $440,000

3200 S Galapago Street Englewood, Colorado

4 Beds 2 Baths 2,000 Sq Ft 0.210 Acres

Sale Type: Active Listing courtesy of HomeSmart Realty

27 Alcott Street $449,900

27 Alcott Street Denver, Colorado

2 Beds 2 Baths 1,462 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of Keller Williams Premier Realty, LLC

3951 W Walsh Place $450,000

3951 W Walsh Place Denver, Colorado

4 Beds 2 Baths 1,636 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of West and Main Homes Inc

5102 W Custer Place $455,900

5102 W Custer Place Denver, Colorado

3 Beds 2 Baths 1,518 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of S.O.S. REALTY

26 Bryant Way $460,000

26 Bryant Way Denver, Colorado

4 Beds 2 Baths 1,422 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of Colorado Realty Resource

4884 W Gill Place $464,900

4884 W Gill Place Denver, Colorado

4 Beds 2 Baths 1,196 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of HomeSmart

4600 W Alaska Place $468,000

4600 W Alaska Place Denver, Colorado

3 Beds 2 Baths 1,688 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Opendoor Brokerage LLC

2111 W Gill Place $475,000

2111 W Gill Place Denver, Colorado

4 Beds 2 Baths 1,456 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of SunnyHill Realty Inc

6305 W 6th Avenue C9 $475,000

6305 W 6th Avenue C9 Lakewood, Colorado

3 Beds 3 Baths 2,700 Sq Ft 0.090 Acres

Sale Type: Active Listing courtesy of SHOWCASE PROPERTIES UNLIMITED

3090 S Cherokee Street $475,000

3090 S Cherokee Street Englewood, Colorado

3 Beds 2 Baths 1,603 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of eXp Realty, LLC

3216 N Columbine Street $485,000

3216 N Columbine Street Denver, Colorado

3 Beds 2 Baths 1,100 Sq Ft 0.100 Acres

Sale Type: Active Listing courtesy of Keller Williams Realty LLC

131 Perry Street $485,000

131 Perry Street Denver, Colorado

4 Beds 2 Baths 1,878 Sq Ft 0.120 Acres

Sale Type: Active Listing courtesy of RE/MAX Leaders

2770 W Cornell Avenue $485,000

2770 W Cornell Avenue Denver, Colorado

3 Beds 2 Baths 1,653 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of Great Way Real Estate Properties LLC

216 Osceola Street $490,000

216 Osceola Street Denver, Colorado

3 Beds 2 Baths 1,762 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of HomeSmart Realty

1660 S Wolcott Court $495,000

1660 S Wolcott Court Denver, Colorado

3 Beds 2 Baths 1,072 Sq Ft 0.210 Acres

Sale Type: Active Listing courtesy of Colorado Home Agents

350 S Newland Street $500,000

350 S Newland Street Lakewood, Colorado

4 Beds 2 Baths 2,250 Sq Ft 0.220 Acres

Sale Type: Active Listing courtesy of Titan One Realty Group

2210 S King Street $500,000

2210 S King Street Denver, Colorado

3 Beds 2 Baths 1,089 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of Porchlight Real Estate Group

1585 S Decatur Street $500,000

1585 S Decatur Street Denver, Colorado

4 Beds 2 Baths 1,848 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of The Gala Realty Group Llc

2792 S Grove Street $505,000

2792 S Grove Street Denver, Colorado

3 Beds 2 Baths 1,995 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of RECOM REAL ESTATE LLC

3401 N Dahlia $505,000

3401 N Dahlia Denver, Colorado

3 Beds 2 Baths 1,024 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Erin and James Real Estate, LLC

380 S Dale Court $519,990

380 S Dale Court Denver, Colorado

4 Beds 2 Baths 1,828 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of HomeSmart

1301 W Tennessee Avenue $520,000

1301 W Tennessee Avenue Denver, Colorado

3 Beds 2 Baths 1,552 Sq Ft 0.190 Acres

Sale Type: Active Listing courtesy of My Home Realty Group

2567 S Stuart Street $524,000

2567 S Stuart Street Denver, Colorado

3 Beds 2 Baths 1,111 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of Realty One Group Premier

2001 S Acoma Street $525,000

2001 S Acoma Street Denver, Colorado

6 Beds 2 Baths 1,920 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Mora Real Estate Co.

2486 S Patton Court $525,000

2486 S Patton Court Denver, Colorado

3 Beds 2 Baths 2,304 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of RE/MAX of Cherry Creek

2203 S Galapago Street $525,000

2203 S Galapago Street Denver, Colorado

2 Beds 2 Baths 2,403 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Douglas County Real Estate LLC

4630 W Center Avenue $525,000

4630 W Center Avenue Denver, Colorado

4 Beds 2 Baths 1,644 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of LEVEL ONE REALTY GROUP

1605 W Florida Avenue $525,000

1605 W Florida Avenue Denver, Colorado

4 Beds 2 Baths 1,852 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of Brokers Guild Real Estate

401 S Osceola Street $525,000

401 S Osceola Street Denver, Colorado

3 Beds 2 Baths 2,517 Sq Ft 0.230 Acres

Sale Type: Active Listing courtesy of Keller Williams DTC

2278 S Patton Court $530,000

2278 S Patton Court Denver, Colorado

4 Beds 2 Baths 2,192 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of Redfin Corporation

2172 S Zenobia Street $539,000

2172 S Zenobia Street Denver, Colorado

3 Beds 2 Baths 1,890 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of INCO Property Management & Sales

1451 S Quitman St $540,000

1451 S Quitman St Denver, Colorado

3 Beds 3 Baths 1,828 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of Coldwell Banker Global Luxury Denver

1631 S Zuni Street $540,000

1631 S Zuni Street Denver, Colorado

4 Beds 2 Baths 1,853 Sq Ft 0.160 Acres

Sale Type: Active Listing courtesy of Compass - Denver

1175 S Gray Street $549,900

1175 S Gray Street Lakewood, Colorado

5 Beds 2 Baths 2,184 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of NAV Real Estate

1977 S Newton Street $549,900

1977 S Newton Street Denver, Colorado

5 Beds 2 Baths 2,192 Sq Ft 0.210 Acres

Sale Type: Active Listing courtesy of SONRISE PREFERRED PROPERTIES

233 S Xavier Street $549,999

233 S Xavier Street Denver, Colorado

3 Beds 3 Baths 1,179 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Keller Williams Preferred Realty

2285 S Newton Street $550,000

2285 S Newton Street Denver, Colorado

5 Beds 2 Baths 2,192 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of RE/MAX ALLIANCE

648 Wolff Street $550,000

648 Wolff Street Denver, Colorado

4 Beds 2 Baths 1,824 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of 8z Real Estate

570 Vrain Street $550,000

570 Vrain Street Denver, Colorado

3 Beds 2 Baths 1,868 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of RE/MAX ALLIANCE

4800 E Arizona Avenue $550,000

4800 E Arizona Avenue Denver, Colorado

3 Beds 2 Baths 1,752 Sq Ft 0.170 Acres

Sale Type: Active Listing courtesy of eXp Realty, LLC

1428 S Perry Street $550,000

1428 S Perry Street Denver, Colorado

4 Beds 2 Baths 1,608 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of Compass - Denver

1420 S Vrain Way $550,000

1420 S Vrain Way Denver, Colorado

5 Beds 2 Baths 1,980 Sq Ft 0.210 Acres

Sale Type: Active Listing courtesy of Keller Williams DTC

1088 S Saulsbury Street $559,900

1088 S Saulsbury Street Lakewood, Colorado

3 Beds 2 Baths 2,340 Sq Ft 0.260 Acres

Sale Type: Active Listing courtesy of Sterling Real Estate Group Inc

2241 S Galapago Street $559,900

2241 S Galapago Street Denver, Colorado

3 Beds 3 Baths 2,173 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Littleton Real Estate Company

7005 Geneva Court $560,000

7005 Geneva Court Lakewood, Colorado

4 Beds 2 Baths 2,234 Sq Ft 0.440 Acres

Sale Type: Active Listing courtesy of Keller Williams Advantage Realty LLC

134 S Reed Court $560,000

134 S Reed Court Lakewood, Colorado

4 Beds 3 Baths 2,494 Sq Ft 0.180 Acres

Sale Type: Active Listing courtesy of EXIT Mosaic Realty

1475 S Gray Street $565,000

1475 S Gray Street Lakewood, Colorado

3 Beds 2 Baths 2,184 Sq Ft 0.140 Acres

Sale Type: Active Listing courtesy of Orchard Brokerage LLC

2085 S Knox Court $565,000

2085 S Knox Court Denver, Colorado

3 Beds 2 Baths 1,500 Sq Ft 0.150 Acres

Sale Type: Active Listing courtesy of BUNNELL REAL ESTATE SERVICES

Property Search

Advanced Search Map Search

Recent Comments

  • Brandon on ADU Guide / How to find a property zoned for an ADU in Denver
  • Hollis J Pirkey on ADU Guide / How to find a property zoned for an ADU in Denver

Call to Action

Click on my link!

Buying or Selling in Denver?

https://livingroomdenver.com/wp-content/uploads/2021/06/06-28-living-room_v2.mp4

Our Mission

We pair people with the right place for a prosperous life.

Contact Us

4045 N Pecos St, Denver, CO 80211
303-720-8491
instagram: @livingroomden
© 2022 · Equity Framework
Privacy Policy · Listings Sitemap · Log in