A Florida homeowner has a $200,000 first mortgage and the property is worth $300,000. The homeowner wants to access equity through a 'home equity line of credit' (HELOC). The maximum HELOC they can typically obtain (assuming 80% CLTV limit) is:

Explanation

Combined Loan-to-Value (CLTV) = 80% × $300,000 = $240,000 total debt allowed. First mortgage = $200,000. Maximum HELOC = $240,000 − $200,000 = $40,000. CLTV considers all liens on the property. Even if the property has significant equity, the HELOC is limited by the CLTV constraint imposed by the lender.