Home Equity FAQs
Understanding home equity loans and how a line of credit can help you is crucial to getting the most out of what you borrow. We're here to answer the most common home equity questions, ensuring you have all the information you need to make an informed decision.
What Is a Home Equity Loan?
A home equity loan uses your house as collateral. At the start of your loan term, you'll receive a lump sum payment that you pay back over time in monthly installments.
What Is a Home Equity Line of Credit?
Instead of receiving a lump sum payment as you would in a loan, a home equity line of credit allows you to withdraw money now or over time (similar to a credit card) and pay back based on the amount you use.
Why Should I Get a Home Equity Loan or Line of Credit?
The main benefit of home equity loans and lines of credit is they typically have a lower interest rate than unsecured loans or credit cards because your house is used as collateral.
Which Option Should I Choose?
Choosing a loan or line of credit depends entirely on your goals. If you're making major renovations that require a large down payment, you may need a loan to get the full amount. However, a line of credit may be the better choice if you plan to use the money more infrequently for smaller projects or emergencies.
What Can I Use My Home Equity Loan for?
Many homeowners use their home equity loans and lines of credit for:
- Home improvements or repairs
- Debt consolidation
- Emergencies
What Is the Borrowing Limit?
The borrowing limit is based on the lender you choose and factors like your credit history.
How Long Does the Approval Process Take?
Once you schedule an application appointment to show us proof of income, property tax information and proof of insurance, we'll start processing the application immediately. You can also start a home equity loan or line of credit application online.
What Is My Home Equity Interest Rate?
A home equity loan has a fixed interest rate since your payment plan is decided in advance.
Interest Tax-Deductible?
Possibly. You'll need to talk to your tax advisor about whether your situation qualifies for tax deductibility.
Submit Your Application Today
At First Commonwealth Bank, we're committed to giving our community everything we can to help people like you succeed. Our team is ready to answer any of your questions about home equity loans, home equity credit lines and other financial questions. Contact us today to learn more or apply whenever you're ready.