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    Home Equity FAQs

    Learn more about home equity

    Home equity is the market value of a homeowner’s interest in their real estate property. It is calculated by determining the current fair market value of the home, minus the amount you owe toward its mortgage payment or other loans secured by the home.
    LTV is calculated by dividing the total amount of liens on a property by the properties fair market value. LTV is used to consider the amount of money you are eligible to borrow and at what interest rate.
    Your debt-to-income ratio is how many bills and obligations you have compared to your income. To calculate your debt-to-income ratio, write down all of your monthly debts, then divide that amount by your monthly gross income. This will give you a general estimate of your debt-to-income ratio.
    When you first apply for a home equity loan, you can use a home value estimator. However, we will determine the value of your home during the application process.
    When reviewing your application information, three common factors used to assess whether you qualify are:
    1. Your credit history (FICO score)
    2. Your loan-to-value ratio (LTV)
    3. Your debt-to-income ratio
    While these commonly assessed factors are used in consideration of your eligibility, there are several other factors that must be verified and meet our underwriting guidelines in order to qualify you for home equity financing.
    The amount you can borrow is largely determined by your available equity or loan-to-value. To find out how much equity you have available, use our calculator.
    Home equity loans can range in term length. Have a conversation with your local banker to find a financing plan that works for your unique needs.
    Yes. Like a traditional mortgage, a home equity loan is an installment loan secured by your home that is repaid over a fixed term. However, a home equity loan allows you to take out an additional loan on your property using the equity available.
    While you may be able to pay off a mortgage with a HELOC, we do not recommend paying an amortizing loan with a revolving line of credit. Instead, we would recommend you pay off your mortgage with a home equity loan.
    Home Equity Loan: A home equity loan is a lump sum of money that you borrow against the equity in your home. Equity is the difference between the market value of your home and what you owe on any loans secured by the home, such as a mortgage loan. You can obtain a home equity loan using your home equity as security, generally without paying bank fees at closing. You can use that money to cover a large expense like home improvement projects.

    Mortgage Refinance: A mortgage refinance loan pays off the remaining balance of your existing home loan and replaces it with a new mortgage loan. This is different from a home equity loan because it replaces your existing mortgage with another mortgage instead of being an additional lien on your home. You may refinance your home to borrow additional money for expenses or to receive a lower interest rate. Unlike a home equity loan, there are generally bank fees associated with refinancing.

    For more information consult our home equity specialists.
    Home Equity Line of Credit: A home equity line of credit is a revolving line of credit you borrow against the equity in your home. Equity is the difference between the market value of your home and what you owe on any loans secured by the home, such as a mortgage loan. You can obtain a home equity line of credit using your home equity as security, generally without paying bank fees at closing. You can use that money to cover a large expense like home improvement projects or smaller expenses over time.

    Mortgage Refinance: A mortgage refinance loan pays off the remaining balance of your existing home loan and replaces it with a new mortgage loan. This is different from a home equity line of credit because it replaces your existing mortgage with another mortgage instead of being an additional lien on your home. You may refinance your home to borrow additional money for expenses or to receive a lower interest rate. Unlike a home equity line of credit, there are generally bank fees associated with refinancing.

    For more information consult our home equity specialists.
    A home equity loan offers a fixed rate, while the rate on a home equity line of credit is variable — or based on an index plus a margin. Visit our Home Equity Loan or Line of Credit product pages to see the current rates.
    A fixed rate, such as a home equity loan, remains the same throughout the life of the loan. Variable rates, like a home equity line of credit, are linked to an index and therefore can change over time.

    A home equity loan is a fixed rate loan that is provided to you in a lump sum and has fixed monthly payments.

    A home equity line of credit is a variable rate, revolving line of credit that allows you access to funds over time.

    To learn more about the differences of a home equity loan and home equity line of credit, read this article: Home equity loan vs. a home equity line of credit: what’s the difference?

    Applying for home equity financing

    The length of time to process the application varies depending on your situation. Your Home Equity Specialist will walk you through the entire process and provide you with an approximate time to close and what you’ll need for a home equity loan.
    The length of time to process the application varies depending on your situation. Your Home Equity Specialist will walk you through the entire process and provide you with an approximate time to close and what you’ll need for a home equity line of credit.
    Begin by visiting the apply now page. This page will give you an idea of what information and documentation may be required during your application. Then click apply now to begin the easy application process, which on average takes 15 minutes or less.
    An appraisal may be required to complete your home equity financing. However, we will determine the type of appraisal needed and contact you after review of your application and collateral information.
    Visit the apply now page to get an idea of what information and documents will be required at application. After submitting your application, your Home Equity Specialist will be with you every step of the way to ensure any additional documentation that might be required is collected.
    There are no closing costs to open a home equity loan or home equity line of credit.
    Late payment or return check fees may apply. However, we do not have fees for early payoffs, application submission or closing costs.
    Fixed rate home equity loan APRs will not change for the life of the loan. Home equity line of credit variable rates may change.
    See our home equity loan or line of credit product pages for more details on available discounts and how to qualify.

    Learn More About Home Equity Modifications

    A modification is a change to your existing home equity line of credit account, but requires a new home equity line of credit application to complete. Once closed, a new HELOC will replace your existing line of credit with the change requested. Keep in mind, as part of this application process we will pull your credit to review your line change eligibility.
    When making a HELOC modification, your line term will reset to 120 months, you may also be able to lower your monthly payments and decrease your current HELOC rate with loan discounts. Additionally, you may qualify for a higher credit limit based on the equity available in your home.
    Submit a new HELOC application online and a home equity specialist will reach out to you for additional details, to answer any questions you might have, and to discuss the benefits of making a modification to your current account. You can also visit a branch to speak with a banker and apply in person.

    Managing home equity financing

    A home equity line of credit — or HELOC — allows you to tap into your home’s equity with a reusable line of credit you can access whenever you need the money. Use your home equity line of credit for whatever you need, such as home improvement, college tuition or debt consolidation. You can also pay off credit cards or other major expenses.
    Consult your tax advisor for your unique situation, but the interest may be tax deductible.
    A home equity loan allows you to tap into your home’s equity to pay for whatever you need, such as home improvement, college tuition or debt consolidation. You can also pay off credit cards or other major expenses.
    To access the funds available in your home equity line of credit, you can:
    1. Log in to Online Banking to schedule a one-time or reoccurring payment.
    2. Call the 24-hour Commerce Account Information Line at 800-453-2265.
    3. Visit a local branch and speak to a banker.
    4. Use your Commerce ATM or Visa® debit card at one of our 24-hour ATMs.
    Home equity loan funds will be deposited directly into the designated checking or savings account shortly after loan closing.
    There are many ways to make a payment to your home equity line of credit account. Use the resources below to make a payment.
    • Log in to Online Banking to schedule a one-time or reoccurring payment.
    • Visit a local branch and speak to a banker.
    • Call the 24-hour Commerce Account Information Line at 800-453-2265.
    • Use your Commerce ATM or Visa® debit card at one of our 24-hour ATMs.
    • Send a check or money order to PO Box 806600, Kansas City, MO, 64180-6600.
    There are many ways to make a payment to your home equity loan. Use the resources below to make a payment.
    • Log in to Online Banking to schedule a one-time or reoccurring payment.
    • Visit a local branch and speak to a banker.
    • Call the 24-hour Commerce Account Information Line at 800-453-2265.
    • Use your Commerce ATM or Visa® debit card at one of our 24-hour ATMs.
    • Send a check or money order to PO Box 806600, Kansas City, MO, 64180-6600.
    The draw period is the line of credit’s term length or the number of days between the open date and maturity date. If there is a balance remaining on your account at the end of the term, the balance will be due in full on the maturity date.
    Please allow 2–4 weeks for the checks to arrive via mail. Use the resources below to get started.
    Year-end tax information is mailed to the address listed on your account at the beginning of each year. If you need a copy of your tax documents, call the customer care center at 800-453-2265 or visit your local branch to request a copy.
    Copies of your statement are mailed to the address listed on your account. However, if you would like a statement re-mailed, call the customer care center at 800-453-2265.
    Paydown refers to paying down the balance of your loan account over time, which results in the reduction of the principal owed. Pay off refers to paying off the balance of debt in full, resulting in a $0.00 balance or account closure.
    No.
    Home Equity Line of Credit:
    1. Log into Online Banking to transfer funds to your checking account.
    2. Call the 24-hour account information line at 800-453-2265 to transfer funds over the phone.
    3. Visit your local branch and speak with a banker.
    4. Use your home equity line of credit account checks.
    Home Equity Loan:
    • Pay off debt personally when you receive loan funds in your checking or savings account.
    • Arrange transfer of balances as part of the loan closing process; speak to your Home Equity Specialist to get started.
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