Home Equity FAQs
The information below is provided as a reference—be sure to contact a Fifth Third Bank representative to learn more about home equity loan and home equity line of credit information. Find answers to home equity FAQs from Fifth Third Bank.
A. The difference between the appraised or market value of your home and the amount of your outstanding mortgage balance is your amount of equity.
Q. How can I use the equity I have built up in my home?
A. Use the equity in your home to consolidate debt, pay for home improvements, finance an education, arrange a vacation or purchase large-ticket items, or any other worthwhile purpose with a home equity loan or line of credit.
Q. Which type of loan is best for my borrowing needs?
A. Like your mortgage loan, home equity lines and loans are secured by the same property against which you originally borrowed. This is good news for you. The security of these loans makes them more attractive to lenders, resulting in rates that tend to be lower than other types of borrowing. In addition, you may be able to deduct the interest portion of your payments for tax purposes, further enhancing your savings.*
Q. Is an equity line or equity loan better for me?
A. The best fit for you depends on your needs:
A home equity loan is a second mortgage where a lump sum payment is made to you. You make monthly fixed payments for a specified period of time. This type of arrangement is a good idea if you plan to satisfy an immediate need, such as debt consolidation or an unexpected expense such as medical bills.
On the other hand, a home equity line of credit acts more like a credit card. A home equity line of credit allows you to establish a credit line for a specified period of time determined by the lender. During that time, you may withdraw cash as needed and are only charged interest on the outstanding amount of the line used. So, this type of arrangement may be better suited for financing expenses that require intermittent payments.
Q. What is the approval process?
A. The home equity application process uses criteria similar to that of the mortgage loan process to evaluate your financial well-being.
Credit reports provided by the major credit reporting agencies are used in almost any credit decision. These historical accounts of past and current financial relationships offer lenders an insight to your ability to manage money. Included in these reports are outstanding debt amounts, payment behaviors (on time versus late payments) and any bankruptcies or judgments. It is a good idea to know what your credit report says about you prior to applying.
An appraisal and title search are ordered upon preliminary approval of your application before a final credit decision is rendered. The entire process usually takes about seven to ten business days.
If you're interested in learning more about home equity loans or additional home equity line of credit information call a Fifth Third representative at 1-866- 53LOANS, visit your local Fifth Third Banking Center or fill out a secure online home equity loan or line of credit application .
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