Mixed race couple renovating home sitting on steps looking at paint swatches
Mixed race couple renovating home sitting on steps looking at paint swatches

heloc 101: life is better with home equity

Do you own a home worth more than the amount you owe on the mortgage? You may be eligible for a line of credit secured by that equity. Known as a “home equity line of credit” or “HELOC,” this type of loan is often easier to qualify for – and with lower interest rates – than other forms of credit. Whether you’re thinking about renovating your home or taking the vacation of your dreams, life is better with equity.

When you apply for a HELOC with us, we will waive closing costs and approval fees, saving you $1,000 in up-front costs.1

What is a home equity line of credit?

A HELOC is one of the most popular ways homeowners take advantage of the equity in their homes to fund large purchases, consolidate debt and more. A HELOC is essentially a second mortgage that provides you with a line of credit based on your home equity. Unlike traditional loan options that only offer a lump sum, a HELOC allows you to borrow as needed over time. First Financial Bank can help you get access to a HELOC to use funds now or in the future with no closing costs or approval fees.1

What is my home equity?

Home equity is calculated by taking the value of your home and subtracting the balance left on your mortgage. For example, if your home is worth $100,000 and you owe $60,000 on your mortgage, you have $40,000 (or 40 percent) in equity.

How much can I borrow against my home?

To calculate how much you can borrow through a HELOC, you need to know the current value of your home. If you don’t know, you can use the estimation tool on Zillow.com. Then find out how much you still owe on the mortgage. With these two numbers, you can calculate the amount you’re able to borrow.

Banks have different maximum percentages of your home equity you can borrow. For example, assume that a bank allows you to borrow up to 80 percent of your equity. To figure out the available equity in your home, multiply the estimated value of your home by 80 percent. Then subtract the amount still owed on any mortgage. This number is the maximum line of credit available to you. 

Using our previous example, here’s how to calculate the available equity of a $100,000 home with $60,000 remaining on the mortgage:

$100,000 x .80 = $80,000

$80,000 - $60,000 = $20,000

The maximum you could borrow on a HELOC at 80 percent of your equity would be $20,000. 

How do I apply for a HELOC?

First Financial Bank makes it easier than ever to apply for a HELOC. When you apply for a HELOC with us, we will waive closing costs and approval fees, saving you $1,000 in up-front costs. First Financial Bank currently lends in Ohio, Kentucky, Indiana, and Illinois. If you and the property are in any of those states, you can start the application for your Home Equity Line of Credit on our website.1


1 All loans subject to credit review and approval.

The information on this page is accurate as of January 2021 and is subject to change. First Financial Bank is not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving bankatfirst.com. First Financial Bank is not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender.

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