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Calculate the Value of Your Home

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Calculating Your Current Home Value

It is important to know the current value of your home prior to starting any remodeling and imporovements, as this will help determine the percentage of home renovation cost that should be applied to your home.

A good meter for home remodeling percentages is around 20-30% of your existing value of your house is an acceptable ranges for most neighborhoods, however, this will vary by region and by type of renovation.

Example: if your current home value is estimated at $200,000 and your home remodeling cost is $40,000, your remodeling percentage is approximately 20% of your home value.

Calculating Your Home Value:

Your home value is determined by a number of factors including:

type of home
location
sales in your respective area
and growth expectations for the community.

The simplest way to calculate your estimated home value is to take the sales value of similar homes in your neighborhood. If homes in your neighborhood are selling for $200,000. Your home value may be similar to that price.

Getting a Home Appraisal

A more thorough home valuation involves an appraised value from a professional. They will estimate your home value based on a review of your home and neighborhood, value assessments from real estate professionals, and a number of other valuation tools and appraised reports. Appraisals cost can vary, depending on the type of appraisal and area. An appraisal will likely be required if you apply for home renovation financing.

Calculating your Equity Value

The calculation is very simple. You simply take the market value of your home and subtract the amount you still owe on the home including any home equity balances or second mortgages which you may have.

Calculating Your Borrowing Potential:

Loan-to-Value, or LTV, is the amount lenders will lend you based on a percentage of your home value minus any existing home loans that you still owe.

Example: if your home value is $200,000 and your existing mortgage balance is $100,000, your equity value is $100,000. At 100% LTV, you can borrow the full amount of your equity value. At 70% LTV, you can borrow 70% of your equity value, which is $70,000 in this example

Calculate the Value of Your Home

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