Home Equity - Frequently Asked Questions

• Is a Home Equity Loan right for me?
  
• How can the equity in my home grow?
  
• Is the interest on my home equity loan tax deductible?
  
• What's the difference between a home equity loan and a home equity line of credit?
  
• How can I use a home equity loan/line of credit?
  
• How do I apply for a home equity loan/line of credit?

Is a Home Equity Loan right for me?

1. You can consolidate your debt. If you have credit cards and other high-interest debt, you may be able to reduce your monthly payments with a home equity loan.
2. You can make home improvements. Adding an extra bedroom, updating your kitchen or replacing an old roof are all smart ways to increase your home’s value and protect your investment.
3. You may save at tax time.* The interest on your home equity loan may be tax deductible* which can save you money year after year.

*Consult your tax advisor concerning the deductibility of interest.

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How can the equity in my home grow?
Equity accumulates in one of two ways: (1) Each time you make a monthly mortgage payment, the principal portion of your payment helps build up the equity in your home; and (2) your home may appreciate in value over time.

Example Scenario
If you paid $100,000 for your home and put down 20 percent, you'd have $20,000 in equity. After five years of mortgage payments, you may have added another $3,000 in equity by paying down your mortgage balance through your monthly mortgage payment. Additionally, during those five years, your home's value may have appreciated. If you sold it today, you may, for example, collect $120,000. Now you have $43,000 in equity in your home ($20,000 down payment, $20,000 in home appreciation, and $3,000 in mortgage balance paid).

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Is the interest on my home equity loan tax deductible?
In many cases, the interest on a home equity line of credit or fixed-rate loan may be tax deductible. Consult your tax advisor concerning the deductibility of interest.

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What's the difference between a home equity loan and a home equity line of credit?
Generally, a loan is for a fixed dollar amount, for a fixed period of time, with fixed monthly payments.

A line of credit is similar to a credit card because it only requires payments when there is an outstanding balance. Unlike a loan, there is no initial balance on a line of credit. You are only required to make monthly interest payments. Because the line of credit is revolving, you can borrow, repay and borrow again. A lump sum payment of the principal balance will be owing at the end of the draw period.

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How can I use a home equity loan/line of credit?
You have earned the equity in your home and can take advantage of it. Many people choose to get a home equity line of credit or fixed-rate loan to consolidate debt, make home improvements, pay for college tuition, or finance a new car.

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How do I apply for a home equity loan/line of credit?
You can apply three easy ways. You can:

1. Apply online. With our quick, easy, secure online application you never have to leave your home. Simply submit your application online and one of our loan specialists will contact you.
2. Apply over the telephone. Call one of our loan specialists toll-free at (888) 880-9704 and apply right over the telephone.
3. Apply in person. Stop by your local Bank of America Banking Center and get the application process started today.

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Lender is LaSalle Bank Midwest N.A., an affiliate of Bank of America N.A. LaSalle Bank Midwest N.A. is an Equal Housing Lender.

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