Loan approval is based on the equity available in a property, home equity lenders must confirm the property value, marketability, condition of the property, and the mortgage balance. The mortgage balance can be confirmed with a recent mortgage statement, or by a lawyer requesting an information statement from the existing lender(s).
Also, Home equity lenders will traditionally lend up to 90% loan to value (LTV). For example, for a property worth $500,000, with a 1st mortgage balance of $300,000, the maximum amount of money accessible to the home owner is 90% of the home value, which is $150,000 as a home equity loan.
The calculation define as (Property Value x 0.90%) – Mortgage Balance = Equity Available.