Frequently Asked Questions

Home equity is the difference between your property’s current market value and the balances of mortgages or other loans secured by the property.

For example, a home worth more than its outstanding mortgage balance may have equity that could potentially be accessed through eligible financing.

However, having equity doesn’t mean you can borrow all of it.

The amount available depends on factors such as:

• Current property value
• Existing mortgage balances
• The lender’s maximum loan-to-value or combined loan-to-value limits
• Your credit and income
• Property type and occupancy
• Other program requirements

We’ll help estimate your available equity and review which financing options may be appropriate.

We offer access to three common forms of home-equity financing:

• Cash-Out Refinance: Replaces your current mortgage with a new loan and provides eligible cash proceeds.
• HELOC: Establishes a revolving line of credit secured by your home.
• HELOAN: Provides a lump-sum home equity loan, generally with a fixed interest rate.

The appropriate option depends on your existing first mortgage, how much money you need, how you intend to use it, and your repayment preferences.

We’ll compare the available structures and explain their impact on your mortgage debt and monthly payment obligations.

The main differences involve how the funds are provided and whether your existing first mortgage is replaced.

Cash-Out Refinance: Replaces your current first mortgage with a new one. You receive eligible cash proceeds after the applicable existing debt and expenses are addressed.

HELOC: Generally remains separate from your first mortgage and allows you to borrow from an available credit line during the draw period.

HELOAN: Generally remains separate from your first mortgage and provides a fixed lump sum that is repaid according to the loan terms.

If your existing first mortgage has a rate you want to preserve, comparing a separate HELOC or HELOAN may be worthwhile.

We’ll help you evaluate the overall costs, payments, and risks.

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home.

During the draw period, you can access available funds as needed, subject to the credit limit and account terms.

For example, if you’re planning a renovation with expenses spread across several months, you may prefer a credit line rather than receiving the entire amount upfront.

Our HELOC options generally have variable interest rates, so the rate and monthly payment can change.

During the draw period, the required payment may differ from the payment required after the repayment period begins.

We’ll explain the available credit limit, rate structure, draw period, repayment terms, and applicable fees before you decide.

A Home Equity Loan (HELOAN) is a separate mortgage secured by your home that provides funds in a lump sum.

Our HELOAN programs generally offer a fixed interest rate and a scheduled repayment term, resulting in predictable principal-and-interest payments.

For example, if you know the amount you need for a major renovation or another planned expense, a lump-sum loan may be worth considering.

Because the HELOAN is separate from your first mortgage, you may be able to keep your existing first-mortgage rate and terms.

However, you’ll have an additional loan payment and lien secured by your home.

We’ll review the available loan amount, repayment schedule, and overall costs with you.

Potentially, yes.

A HELOC or HELOAN can provide access to eligible home equity through a separate second mortgage rather than replacing your existing first mortgage.

For example, if you have an existing fixed-rate first mortgage that you want to keep, a separate home-equity loan may allow you to preserve those terms.

However, adding a second mortgage increases the debt secured by your property and creates an additional payment obligation.

We can compare the available home-equity options against a cash-out refinance to help you understand the differences in payments, interest rates, upfront expenses, and repayment terms.

Depending on the lender and program, eligible home-equity funds may be used for purposes such as:

• Home improvements or renovations
• Education expenses
• Certain investments
• Eligible business-related needs
• Debt consolidation
• Other permitted financial goals

The available uses depend on the loan agreement and program requirements.

It’s also important to consider that home-equity financing is secured by your home.

For example, using home equity to consolidate credit-card debts may change unsecured debt into debt secured by your property.

We’ll help you understand the financing structure and repayment obligations so you can evaluate whether it fits your goals.

A HELOC and HELOAN can have very different repayment structures.

HELOC:

• Generally has a variable interest rate.
• Allows draws from the available credit line during the applicable draw period.
• May have changing payment requirements.
• Can involve a different repayment structure once the draw period ends.

HELOAN:

• Generally has a fixed interest rate.
• Provides a set loan amount upfront.
• Has scheduled monthly payments according to the loan terms.
• Doesn’t operate as a revolving credit line.

Neither is automatically the right choice for every borrower.

We’ll help you compare the available rates, payments, fees, and repayment structures based on how you intend to use the funds.

Start by thinking about how much money you need, when you need it, and how you prefer to repay it.

For example:

• If you need funds for several expenses occurring over time, a HELOC’s revolving structure may be useful.
• If you need a specific amount upfront and prefer scheduled fixed-rate payments, a HELOAN may be worth considering.
• If refinancing your existing first mortgage also supports your broader financial goals, a cash-out refinance may be another option.

We’ll compare the available loan terms and help you understand the effect of each choice on your current mortgage, monthly payments, and overall borrowing costs.