Why Two HELOC Providers May Give Your Home Two Different Values
HELOC lenders don't use the same property value. They use automated valuation models — and different programs use different AVM vendors, different models, and different confidence thresholds. The result can be two materially different accepted values for the same property.
"A 90% CLTV program with a low AVM can produce less available equity than an 80% CLTV program with a higher accepted valuation."
What Is an AVM?
An automated valuation model (AVM) is a computer-generated estimate of a property's value based on comparable sales, property characteristics, and statistical modeling. AVMs are used by digital HELOC programs to value properties quickly — often in seconds — without requiring a full appraisal.
Why Different Programs Get Different Values
Different AVM vendors use different data sources, different comparable-sale selection methodologies, and different statistical models. The same property can receive meaningfully different values from different AVMs. Additionally, each program has its own confidence threshold — if the AVM's confidence score is too low, the program may require a higher-quality valuation or decline to proceed.
The AVM Waterfall
When an AVM doesn't return a value or returns a low-confidence value, programs typically fall back to a broker price opinion (BPO) or a full appraisal. This fallback process — the AVM waterfall — can add time and cost to the process. Some programs handle this more smoothly than others.
Why Advertised CLTV Isn't Enough
A program advertising 90% CLTV uses that percentage against its accepted AVM value — not your estimate of your home's value. If Program A accepts a $425,000 AVM and allows 90% CLTV, the maximum combined liens are $382,500. If Program B accepts a $500,000 AVM and allows 80% CLTV, the maximum combined liens are $400,000. Program B produces more available equity despite a lower advertised CLTV.
Illustrative Example
Existing liens: $300,000
Program A
- Accepted AVM
- $425,000
- Max CLTV
- 90%
- Max combined liens
- $382,500
- Available HELOC
- $82,500
Program B
- Accepted AVM
- $500,000
- Max CLTV
- 80%
- Max combined liens
- $400,000
- Available HELOC
- $100,000
This is a mathematical illustration only. Actual AVM results vary by property, program, and market conditions.
Compare What Different Programs Actually Value Your Property At
Send Morgan Hardy the basics once. He'll run the actual prequalification and valuation results across relevant programs so you can compare real numbers.
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