When shopping for a home equity loan or line of credit, there are many questions to consider. Here are answers to get you started.
Home Equity Frequently Asked Questions
What is Home Equity?
What can I pay for with a Home Equity Loan or Line of Credit?
How do I tap into my Home Equity?
What is a Home Equity Loan?
What is a Home Equity Line of Credit?
What are the benefits of a Home Equity Loan or Line of Credit?
What is the difference between a Home Equity Loan and a Home Equity Line of Credit?
How can I get a Home Equity Loan or Line of Credit?
What are the advantages of Home Equity Loans?
What type of expenses can my Home Equity Loan cover?
How do I know if I’m eligible for a Home Equity Line of Credit?
What determines the variable interest rate on a Home Equity Line of Credit?
What are the terms of a Home Equity Loan?
What are the terms of a Home Equity Line of Credit?
Is the interest tax deductible?
Is the interest rate fixed or variable?
Can I change the interest rate on my Home Equity Line of Credit from a variable to a fixed rate?
How can I calculate how much equity I have?
How can I estimate my home’s market value?
How much can I borrow?
Are discounts available if I make my payments automatically?
What else should I consider when obtaining a loan against the equity in my home?
Who should get a Home Equity Loan?
How will my Annual Percentage Rate (APR) be determined?
How are interest rates determined for Home Equity Loans or Lines of Credit?
Are there any fees associated with a Home Equity Loan or Line of Credit?
Can I pay balances from other accounts with my Home Equity Loan or Line of Credit?
How can I close my Home Equity Line of Credit?
- Request a payoff quote by calling 573.761.3664 during regular business hours. We'll fax or mail you a quote within 3 business days after we receive your request. Please allow 10 days for postal delivery.
- Pay all amounts due on your account (including principal, interest, charges, lien-release and/or other fees) with secured funds (such as a cashier's check sent to the address below to bring your balance to $0.
- Sign the authorization form enclosed with the payoff quote confirming that you want to close your account. Make sure to include your full account number on the form and return it by mail at the address below or fax it to 573.636.3563.
ATTN: Loan Administration
PO Box 106000
Jefferson City, MO 65110
I’ve already paid off my outstanding balance. Is there anything I need to do to close my account?
ATTN: Loan Administration
PO Box 106000
Jefferson City, MO 65110
You can apply for a Home Equity Loan or Line of Credit for a home that you own and live in as your primary residence or a property that is a second home or a vacation home that you occupy. This residence must be a single-family dwelling. Eligible property types include Planned Unit Developments (PUDs) and condominiums. Other properties, such as investment properties, manufactured homes, commercial properties, and trusts are not eligible for a Home Equity Loan or Line of Credit.
Your Personal Banker will provide you with an initial list of documents we need to get started. Every loan is different, so we may request additional documents as we move through the loan process.
No. You can submit documents via email, fax or in person at one of our banking centers. Submitting documents quickly will help speed up the processing of your loan request.
The actual length of time to process the application varies by homeowner. Typically, the average time is 30 days. Once you’ve signed the documents at closing, the funds will be available after a waiting period of three business days on accounts secured by a primary residence. When you apply for a loan, we’ll make sure that you’re updated on your progress and closing date along the way.
Our loan personnel will order an appraisal. In some cases, an appraiser will drive to your home and conduct an appraisal by viewing the exterior only.
- Single-family residence (such as a house, townhouse or row house).
- Attached single-family residence (such as a condominium).
- Cooperative shares (co-op)
- Two-unit residences
The loan closing process is quick and convenient. The average closing takes about 45 minutes in the banking center most convenient for you. In some states, a title company will close the loan. Once the loan is closed, you have three business days to change your mind and cancel the loan, known as the right of rescission. Funds are disbursed on the 4th business day.
Yes. Once your loan funds, you can view your account with Online or Mobile Banking. You'll be able to transfer funds, manage payments and set up alerts.
Yes. One of the documents that will be provided to you at closing is the form for enrolling in automatic payments. This form asks for information on the account you would like your monthly payment automatically withdrawn from.
When a homeowner has a primary mortgage with a higher interest rate than the prevailing rates and they want to access equity, they can consider a cash-out refinance. This occurs when they refinance their original mortgage to get better terms on a new loan, but also borrow more than the original loan balance so they can receive the added loan amount in cash.
Yes, you may make additional principal payments online, in person at any Providence Bank location, or by mail using the payment coupon attached to your monthly statement.
Your draw and repayment period can last up to 10 years, depending on the terms of your credit agreement. You can continue to make monthly payments throughout the payment period to pay off your outstanding balance. Or, you can pay off the total balance at any time.
No. The draw period for your existing account cannot be extended. If you meet current credit criteria, you could refinance the outstanding balance into a new Home Equity Line of Credit or Home Equity Loan.
The minimum monthly payment is based on the amount owed at the time of billing. The minimum payment is $50.
No action is required on your part for this automatic payment services to continue. However, please consider the impact on your checking account if your minimum payment amount is expected to increase.
Your county clerk's office charges a fee for processing the release of the lien on your Home Equity Loan or Line of Credit.
A Home Equity Loan is often called second mortgage because the lender is in what is called second lien position. The lender is also referred to as junior lienholder. This means that if the homeowner did not make the payments of either the first mortgage or the Home Equity Loan or Line of Credit, either lender could foreclose. However, the lender in the first position is repaid first. The junior lienholder is only repaid in full if there is enough money from the foreclosure action to repay both balances. For this reason, second mortgages have higher interest rates than first mortgages – the lender is in a riskier position.