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Home Equity FAQs

Q: What is refinancing?

A: In simple terms, refinancing replaces your current mortgage loan or home equity loan with a new one. Homeowners typically refinance to reduce monthly payments (because the current rates are lower than what they are paying), to switch to a different type of mortgage, or to cash out equity in their home.

Q: Why should I refinance?

A:There are numerous reasons customers refinance the loans they already have. Some of these are to lower the monthly payment or interest rate, to switch from an adjustable rate to a fixed rate or vice-versa, to refinance for a higher amount in order to pay off other debts or get cash, or to change the remaining term of the loan. Whatever your needs, we can help you decide what makes the most sense for you.

Q: At what point might refinancing save me money?

A: If mortgage rates are 5/8-percent lower than what you're currently paying, refinancing may offer you savings against what you are currently paying.

Q: How do I get started?

A: To get started on a new refinancing application, call our Customer Information Center at 508.732.7072, visit a local branch, or apply online.

Q: How do I determine my home's equity?

A:The equity in your home is determined by subtracting your outstanding mortgages or liens from the market value of your property. Try our Calculator to estimate the current equity in your home.

Q: What is a home equity line of credit?

A: A home equity line of credit is an open line that is secured by your primary or secondary residence. It allows you to borrow funds at any time, up to your available credit limit.

Q: Do I need a home equity loan or a home equity line of credit?

A: Both products use your home as collateral. The main differences between the products are: 

The home equity line of credit is accessible for a long–term draw period. Once you pay down your balance, you then have more money available to spend again if necessary. A home equity loan disburses all funds at once when the loan term starts and you cannot access any further funds without refinancing.

A home equity line of credit has a variable interest rate. A home equity loan has a fixed rate.

A home equity line of credit has a payment that can change every month, either because the balance changes (increases if you spend more; decreases if you pay down what you owe) or because the interest rate changes because of the Prime rate changing. A home equity loan has payments that don't change.

Q: Do I want an interest-only loan?

A: Interest-only loans allow you flexibility on monthly payments when your cash flow does not permit a fully amortizing loan payment. The minimum loan payment covers the interest portion of the loan only, so your principal only decreases if you pay above and beyond the interest. You have the flexibility to decide how much principal you pay each month, so you can pay little or none if times are tight, or a lot if you have extra that month.

Q: Do I need a home appraisal?

A: Sometimes we do not need to conduct an appraisal; other times we have to conduct a full appraisal, and there are levels in between. Only after reviewing your application and collateral information will it be determined whether one is needed for your situation.