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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4545
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I have a first mortgage loan under

Customer Question


I have a first mortgage loan under my name for the amount: $238,095.00 and the current Principal balance is: $230,796.87.

Right now, I am buying a second home with 20% down plus closing where I will be moving in with my parents, wife and kid.



: $290,000.00

TERM: 360

Months due in 360

TYPE OF LOAN: Conventional - 360




am showing my primary home as a investment property which will generate $3,600 rental income for the entire home. My current mortgage payment is: $2,349.24 per month. I also have a student loan for $26,000 which I been making the monthly payments on time for quite some time now.


I am looking to get a home equity loan or cash out for about $90,000 from my first property to do some renovation on my first home. Is it possible? I am located in New York, NY and my credit score is 740+.

Submitted: 2 years ago.
Category: Finance
Expert:  Rakhi Vasavada replied 2 years ago.

Dear Friend,

Hello and welcome. Thank you for providing an opportunity to assist you.

The amount of money you can borrow when applying for a home equity loan is based on several factors including your home's loan-to-value.

In most cases, lenders allow you to borrow up to 85 percent of the equity in your home, which is calculated by subtracting the amount you still owe on the first mortgage from the appraised value of the home. Your credit rating, length of employment and ability to repay the loan are other things a lender consider before making a loan.

So, in your case, you will have to get your house appraised and from that appraised value, your owed amount will get deducted. You would be eligible for the quantum of 80-85% of that difference amount. Let me illustrate you by example.

If your appraised value of home is $500 and you still owe $350 to your first mortgage, you would be eligible for some 80-85% of the $150 difference.

I am sure this would help. I wish you good luck.

You may please leave a positive rating if this helps as this is the only way we are compensated for assisting you. Alternatively, you may revert back with a reply if you need further assistance or if I have missed out on any aspect of your question.

Warm Regards,