Home equity loans offer:
- Combined borrowing amounts up to 90% of your home’s value.
- Flexible terms and competitive interest rates.
- Quick, local decisions.
- Online access to applications.
Frequently Asked Questions about Home Equity Loans:
How does a home equity loan work?
In most cases, a home equity loan is a second mortgage. You will borrow a lump sum and make regular monthly payments on it each month for the entire life of your loan, which can range anywhere from ten years to fifteen years.
Do I have to pay closing costs on a home equity loan?
Yes, every home transaction, including a home equity loan, will incur closing costs. They typically range from 2-4% of the total loan.
What’s the difference between a Home Equity Loan and a Home Equity Line of Credit (HELOC)?
With a Home Equity Loan, you borrow the sum of money upfront and make a fixed payment. With a HELOC, you borrow the money as you need it.
A HELOC works similarly to a credit card, as it is a revolving line of credit. Our HELOC stays open for 5 to 10 years, depending on your preference. You are billed 1% of the outstanding balance, there is no annual fee. We also offer a no closing cost option.
A home equity loan will charge interest at a fixed rate. A HELOC will charge interest at an adjustable-rate that can change at the beginning of each month. Our HELOC rate is based on the Wall Street Journal Prime rate. We notify our clients each time the Prime rate changes.
What’s the difference between a Home Equity Loan and Refinancing?
Refinancing will help you pay down the debt of your current mortgage. A home equity loan is a separate loan, which will require a separate monthly payment. For this reason, refinancing will typically come with a lower interest rate than a Home Equity Loan.
Do home equity loans require an appraisal?
Yes, all home equity loans will require an appraisal for the same reason your home required one initially. Since it’s technically a second mortgage, the lender will need to verify the value of your home.
How much can I borrow on a home equity loan?
You may be able to borrow up to 90% of your home’s value with a home equity loan.
How do I get approved for a home equity loan?
First, you should know how much you’d like to borrow and exactly what you want to use it for.
Second, in addition to other underwriting guidelines, you must meet the following requirements to qualify for a home equity loan:
A credit score of 660 or higher (with a higher score, you have a chance of being approved for a better rate)
A debt-to-income ratio of less than 43%
A maximum loan-to-value ratio of 90%
Can you pay off a home equity loan early?
Yes, Field & Main Bank does not charge a prepayment penalty on home equity loans.
Are home equity loans tax deductible?
You should always consult a tax advisor regarding the tax-deductibility of any home mortgage.
Does a home equity loan count as income?
Home Equity Loans do not count as income or earned money.
Can I sell my house when I have a home equity loan?
Yes, you can sell your house when you have a home equity loan. However, the sale price of your home should cover any outstanding balances connected to your home.
Why Choose Field & Main for my Home Equity Loan?
With Field & Main, you’ll have access to lenders before, during, and after the loan closes. We strive to respond to our clients in a timely manner, usually within 1 business day. Apply online or visit one of our convenient locations in Henderson, Lexington, or Cynthiana, Kentucky and Evansville, Indiana.
Let’s get started on your home equity loan.