Home equity lines are offered based on the what is commonly known as Combined Loan to Value (CLTV). Which is determined by combining the 1st mortgage loan and the desired credit line and dividing by the value of the property.
The higher the ratio the higher the rate. As the the higher ratio is normally associated with higher risk level. Factors that will determine what ratio will be acceptable to a lender include but are not limited to; credit rating, documentation level, debt ratio, and loan amount.
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