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Home Equity 101
Why Get A Home Equity Loan or Line of Credit?
There are many reasons to consider a home equity loan or line of credit. As the values of homes continue to increase over time, many people use equity they have built in their home to finance a major renovation, consolidate debt, pay for education, or make a big purchase. Putting your equity to work for you through a line of credit or equity loan offers many benefits - including a possible return on your investment, and potential tax deductions.*

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Home Improvement

Many homeowners access their home equity to pay for remodeling projects or other home improvements, such as:

Many home improvement projects may increase the resale value of your home - and pay for themselves over time. Consider the following:

Project Cost Avg. Payback
Replacing Roof $18,000 67%
Replacing Siding $10,000 83%
Add Extra Bedroom $47,000 53%
Additional Closet Space $500-$1,000 50%
Renovate Bathroom $16,000 78%
Upgrade Kitchen $21,000 83%
Upgrade to Energy Efficient Windows $250/$400 each 50%
Source: SmartMoney Published 7/17/08

Get your home improvement project started. Apply online for the home equity product that's right for you.

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Debt Consolidation

Another reason to get a home equity line or loan is to better manage your debt. Instead of continually paying high-interest on your outstanding bills each month, a home equity line or loan can potentially reduce your monthly payments and enable you to pay off your debts more quickly through a single, consolidated payment. Consolidating your bills with a lower-rate home equity line of credit or loan could significantly reduce the amount of interest you pay.**

Consolidating can help. Know the facts: Source: Federal Reserve Bulletin, February 2009; Financial Planning, 6/2/09

Start consolidating your debt into one low rate today.

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Choosing the Right Type of Home Equity Product

There are several different home equity products available - each designed to fit your needs. When considering a home equity product, ask yourself the following:

Use our calculators to estimate your payment, tax savings or current equity position.

Home Equity – A Popular Source of Financing

Source: Consumer Bankers Association, 3rd Quarter 2008 Home Equity Lending Trend Report

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Key Terms to Know

If you're considering a home equity product, it is important to be aware of some key terms:
  1. Margin: To determine the APR (Annual Percentage Rate) on a home equity line, a lender will add a certain amount of percentage points to an index like the Prime Rate. This additional amount is called a "Margin."

  2. Rescission: In the final stages of the home equity process - between the time when the loan is closed and the funds are given to the homeowner - federal law requires that the homeowner get three days of "thinking time" to make a final decision. This is called the "rescission period."

  3. Cap: Found in many variable-interest home equity plans, the maximum limit on the rate of interest is called the "Cap."

For more definitions and key terms, visit our Glossary.

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Preparing for the Home Equity Process

When beginning the home equity application process, you'll need to gather the following information: Learn the Value of Your Home

If you're considering a home equity line of credit or a home equity loan, chat with a SunTrust representative to get an estimate of what your home is worth.1 You can use that information to calculate how much you may be able to borrow and even apply directly for a loan online with the chat representative.

To get your estimate, all you'll need to provide is your home address, and in some cases, the purchase date and purchase price for your property.

Chat Now

Learn more about the home equity application process.

For additional information on how an equity product can benefit you, call us at 800.279.4824, visit your local SunTrust branch, or apply online for a SunTrust Home Equity Line or Loan today.

*Consult your tax advisor regarding the deductibility of interest.

**Consolidating your debt and extending the repayment term may add to the total amount of interest paid over the original term(s) of your loans(s).

***You do not have to include information about income from alimony, child support or separate maintenance payments unless you want us to consider this income in connection with application for credit.

1 HomeValuePower® is an automated tool that provides an estimate of property value. This is an estimate only and will not be used for underwriting purposes. Other valuation methods, up to and including a full appraisal, may be required. No warranties as to the accuracy or completeness of the estimate, or public record information used in part to derive the estimate, is made or implied by SunTrust Bank.

Mortgage products are provided by SunTrust Mortgage, Inc. View our licensing agreement.

Additional Information

Have questions? We're
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