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Home / Borrow / Home Equity Line of Credit / HELOC FAQs
Have questions about the home equity process and what you can do to get the best deal? Here you’ll find answers to our most frequently asked questions, along with access to our online and in-person support.
Follow these steps to calculate your home equity: 1. Determine the estimated value of your home. Use this tool to quickly determine that value. 2. Check the remaining mortgage balance on your latest mortgage statement. 3. Determine the “Loan to Value (LTV) ratio by dividing the remaining mortgage balance by the current value. 4. Calculate your home equity using the formula:. 100% – LTV = Home Equity.Example: If you have a $400,000 home with a remaining mortgage balance of $244,000. – The LTV is $244,000/$400,000 or 0.61 (61%). – The home equity for this example is: 100% – 61%= 39%. Note: Fidelity Bank usually requires less than an 80% LTV ratio, which equals 20% home equity.At Fidelity Bank, we pride ourselves on making the process as easy and convenient as possible. Talk to a Fidelity Banker whichever way you choose – in person, on the phone, or digitally.
While automated valuation tools (Zillow, Redfin, etc.) offer a preliminary glimpse into a property’s potential value, they lack the comprehensive insight provided by seasoned professionals in the NEPA, Lehigh Valley real estate market. Partnering with a local Fidelity Bank expert ensures a local understanding beyond mere algorithms.Our network of Mortgage Consultants possess years of local market expertise, to discern the unique qualities of your property – be it a Lackawanna gem or a Luzerne diamond – and translating them into tangible market value.Here’s how Fidelity Bank’s local Mortgage Consultants empower informed decisions:Data-Driven Insights: Leveraging market intelligence and proprietary resources, they provide a clear picture of current conditions and future projections.Hyperlocal Expertise: They navigate the intricacies of specific neighborhoods, understanding subtle details that impact property value.Ready to surpass algorithmic estimates and harness the power of local expertise? Use our Chat to connect with a Fidelity Bank Mortgage Consultant in your NEPA community today.
HELOCs and Home Equity loans are usually taken out to finance a home improvement. But there are many ways to maximize the current equity in your home to increase the size of your loan. Simple projects to add the most value to a home are:Paint. Lighten and brighten your rooms. Paint rooms white or with a light color paint to neutralize your space.Revamp the exterior. Curb appeal always add value. Keep your shrubs, trees, and grass trimmed and tidy. Add a splash of color with vibrant plants. Consider a focal point like a flagstone walkway.Clean and declutter you home. While this does not actually increase usable space, the appearance of roomier closets, useable basement space and a well-maintained interior add to the quality and value of your house.List Your Home Improvements. Be sure to provide a list of your home’s improvements and upgrades. Feel free to provide details descriptions of the material and costs. This will ensure that the Appraiser is aware of all the amenities to the house. Let them consider every feature for the determination of value.
No, the entire credit limit is available for use once the account is opened. Similar to a credit card, you can draw on the line of credit as needed, whether it’s all at once, in portions, or just a small amount.
No, Fidelity Bank does not charge application or origination fees for HELOCs. We aim to provide a cost-effective solution for your financial needs.
A Home Equity Line of Credit has two different periods, a draw period and repayment period. The draw period is 10 years, where you have ongoing access to available funds and can use the funds how you’d like. Once the draw period ends, the account enters the repayment period.During the repayment period, you can no longer advance on the home equity line of credit, and must make principal and interest payments. The new minimum payment will ensure the balance is paid in full by the maturity date. The interest rate on the balance continues to be variable.
You will have ten years to draw funds from your HELOC. During this time, you’ll make minimum payments as required.
Yes, during the draw period of your HELOC, you will make payments that cover both the interest on the amount borrowed and a portion of the principal. This helps you manage your balance and interest charges effectively.
Once the draw period ends, you will no longer be able to withdraw additional funds. If there is an outstanding balance, you will transition to a repayment phase with required payments that include both principal and interest. Your payments may increase if you have only been making interest-only payments during the draw period.
After the draw period ends, you will have fifteen years to repay the HELOC. Monthly payments during this repayment period will include both principal and interest. The APR remains variable and is based on the Wall Street Journal prime rate plus a margin specified in your loan documents.
The interest on a HELOC may be tax-deductible depending on your circumstances. It is advisable to consult with a financial advisor or tax professional for personalized advice.
