Learn more about home equity
What is DTI (debt-to-income) ratio?
Your debt-to-income ratio is how many bills and obligations you have compared to your income. To calculate your debt-to-income ratio, write down all of your monthly debts, then divide that amount by your monthly gross income. This will give you a general estimate of your debt-to-income ratio.
How do I find out the value of my home?
When you first apply for a home equity loan, you can use a home value estimator. However, we will determine the value of your home during the application process.
How do I qualify for a home equity loan or HELOC (home equity line of credit)?
When reviewing your application information, three common factors used to assess whether you qualify are:
- Your credit history (FICO score)
- Your loan-to-value ratio (LTV)
- Your debt-to-income ratio
While these commonly assessed factors are used in consideration of your eligibility, there are several other factors that must be verified and meet our underwriting guidelines in order to qualify you for home equity financing.
How long are home equity loans?
Home equity loans can range in term length. Have a conversation with your local banker to find a financing plan that works for your unique needs.
Is a home equity loan a mortgage?
Yes. Like a traditional mortgage, a home equity loan is an installment loan secured by your home that is repaid over a fixed term. However, a home equity loan allows you to take out an additional loan on your property using the equity available.
Can you use HELOC funds to pay off a mortgage?
While you may be able to pay off a mortgage with a HELOC, we do not recommend paying an amortizing loan with a revolving line of credit. Instead, we would recommend you pay off your mortgage with a home equity loan.
What is the difference between a home equity loan and mortgage refinance?
Home Equity Loan: A home equity loan is a lump sum of money that you borrow against the equity in your home. Equity is the difference between the market value of your home and what you owe on any loans secured by the home, such as a mortgage loan. You can obtain a home equity loan using your home equity as security, generally without paying bank fees at closing. You can use that money to cover a large expense like home improvement projects.
Mortgage Refinance: A mortgage refinance loan pays off the remaining balance of your existing home loan and replaces it with a new mortgage loan. This is different from a home equity loan because it replaces your existing mortgage with another mortgage instead of being an additional lien on your home. You may refinance your home to borrow additional money for expenses or to receive a lower interest rate. Unlike a home equity loan, there are generally bank fees associated with refinancing.
For more information consult our home equity specialists.
What is the difference between a home equity line of credit and mortgage refinance?
Home Equity Line of Credit: A home equity line of credit is a revolving line of credit you borrow against the equity in your home. Equity is the difference between the market value of your home and what you owe on any loans secured by the home, such as a mortgage loan. You can obtain a home equity line of credit using your home equity as security, generally without paying bank fees at closing. You can use that money to cover a large expense like home improvement projects or smaller expenses over time.
Mortgage Refinance: A mortgage refinance loan pays off the remaining balance of your existing home loan and replaces it with a new mortgage loan. This is different from a home equity line of credit because it replaces your existing mortgage with another mortgage instead of being an additional lien on your home. You may refinance your home to borrow additional money for expenses or to receive a lower interest rate. Unlike a home equity line of credit, there are generally bank fees associated with refinancing.
For more information consult our home equity specialists.
Applying for home equity financing
Will the APR change?
Fixed rate home equity loan APRs will not change for the life of the loan. Home equity line of credit variable rates may change.
Learn More About Home Equity Modifications
What is a HELOC modification?
A modification is a change to your existing home equity line of credit account, but
requires a new home equity line of credit application to complete. Once closed, a
new HELOC will replace your existing line of credit with the change requested.
Keep in mind, as part of this application process we will pull your credit to review
your line change eligibility.
What is the benefit of making a HELOC modification?
When making a HELOC modification, your line term will reset to 120 months, you
may also be able to lower your monthly payments and decrease your current
HELOC rate with loan discounts. Additionally, you may qualify for a higher credit
limit based on the equity available in your home.
How do I start a loan modification?
Submit a new HELOC application online and a home equity specialist will reach out to you for additional details, to answer any questions you might have, and to discuss
the benefits of making a modification to your current account. You can also visit a branch to speak with a banker and apply in person.
Managing home equity financing
How can I use a home equity line of credit?
A home equity line of credit — or HELOC — allows you to tap into your home’s equity with a reusable line of credit you can access whenever you need the money. Use your home equity line of credit for whatever you need, such as home improvement, college tuition or debt consolidation. You can also pay off credit cards or other major expenses.
Can I use a home equity loan for anything?
A home equity loan allows you to tap into your home’s equity to pay for whatever you need, such as home improvement, college tuition or debt consolidation. You can also pay off credit cards or other major expenses.
What is the difference between a paydown and a pay off?
Paydown refers to paying down the balance of your loan account over time, which results in the reduction of the principal owed. Pay off refers to paying off the balance of debt in full, resulting in a $0.00 balance or account closure.