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Personal Banking - Frequently Asked Questions
Home Equity Options
1. Home Equity Basics
1.1 What is home equity?1Home equity is the value of your house minus the mortgage and any other liabilities secured against your home. As your home's value increases, so does your equity, because you would have more cash after selling the house and paying off your mortgage.
1.2 What are the benefits of borrowing against my home equity?If you need access to cash, borrowing against your home equity may have tax advantages (consult your tax advisor) and may offer a lower interest rate than other options, such as credit cards or personal loans.
1.3 How can I use the funds from a home equity line of credit?Once the account is funded, you can use funds for any personal, family, or household need. Consolidating debt, financing home improvement projects, and paying for a child's education are common reasons why people tap into home equity. Read more about using your home equity.
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2. Home Equity Line of Credit
2.1 What is a home equity line of credit?1A home equity line of credit is a form of revolving credit with a specific credit limit which is secured by the equity in your home.
2.2 How do I access my available credit?To access your available credit, you will use the account checks that we provide and write a check for $500 or more to the party you want to pay. You may also write the account check to yourself for deposit to your checking account, and then pay parties using your checking account.
2.3 When am I required to repay the amount I borrow?During the application process, you will elect the payment method that will be applicable for the first 10 years of the account of either interest-only, or interest plus principal. The rate/APR you will pay is the same for both payment methods.
If you have not borrowed against your available credit, then no monthly payments are required. Once you borrow funds, you will begin making monthly payments based on the payment method you selected. If you selected interest-only payments, then your required monthly payment will consist of the accrued interest on the outstanding principal balance. If you selected interest plus principal payments, then your required monthly payment will consist of the accrued interest on the outstanding principal balance plus a portion of the outstanding principal balance.
2.4 Can I get a home equity line of credit for a rental or vacation property?Yes. You can secure a line of credit on a one-to-four unit rental property or a one-unit vacation home. Click here to apply online.
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3. Home Equity Line of Credit Application Process
3.1 How do I apply?1Call 1-866-UB-LOANS or apply online for a home equity line of credit or a rental or vacation property line of credit.
3.2 How can I get a discount on my interest rate?Save 0.25 percent on the interest rate when you set up automatic payments from your Union Bank checking or savings account. If either party terminates the automatic payments, the interest rate will be increased by 0.25 percent and the monthly payment will increase accordingly.
3.3 Does a home equity line of credit constitute a lien on my home?Yes. Union Bank will take a deed of trust on your home.
3.4 What happens if I sell the house before the line of credit is paid off?You will need to pay any outstanding balance in full.
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