Dear Frost,
I feel fortunate to have survived the pandemic relatively unscathed thus far, but stories from friends and family members have definitely been a bit of a wake-up call. I’m thinking about taking out a home equity loan on my condo so that I can have access to funds in the future, but can you break down the world of home equity loans a bit? — Condo Conscious
Dear Conscious,
Before we get into the details, good on you for considering all your options. The initial economic shock of this pandemic caught a lot of people by surprise, so it’s natural to look for ways to find stability as time goes on. Like so many other subjects in the world of finance, loans can be a great option if you take the time to do your research and make an informed decision. That’s why you’re here, right? Let’s get into it.
Know Your Situation
As you get your bearings, the specifics of your situation may help determine whether a home equity loan or a home equity line of credit (the latter is often referred to as a HELOC) will work best for you. For both of these, the amount you receive is based on the amount of equity you have in your home. But, they do have their differences and it’s important to take those into account.
A home equity loan provides you with a lump sum of money that must be repaid over a fixed period of time at a fixed interest rate. On the other hand, a home equity line of credit is a revolving account that lets borrowers draw money up to the available maximum amount, then repay the money (with interest) and then draw it again. While a home equity line of credit allows you to draw only the funds you need when you need them, it should be noted that they often come with an adjustable interest rate. This means that the amount you pay in interest could change over the course of having the home equity line of credit. Knowing these differences can help you determine which one to pursue.
Know the Details
As a rule, you need to know all the details when you’re considering either a loan or a line of credit. There are many factors to consider, like the length of time (sometimes referred to as the term), the interest rate, whether or not that interest rate is fixed or adjustable, the tax benefits and any associated fees. Home equity loans and home equity lines of credit are unique: Unlike a personal loan or personal line of credit, they require collateral in the form of, you guessed it, your home or in this case, your condo.
Know the Risks
It’s crucial to be aware of the risks when taking out a loan or line of credit, especially on your home. For example, as mentioned above, a home equity line of credit typically has an adjustable interest rate. So, in a rising interest rate environment, you could end up paying more depending on the outstanding balance on your line of credit. An additional thing to keep in mind is that if you make late payments on a loan, your credit score could be affected. In short, it’s a best practice to make loan payments on time and to pay lines of credit down as quickly as possible. And of course, it’s very important to keep in mind that your home is on the line if you fail to make payments as required by the terms of your loan or line of credit. So, be aware of other credit resources if repayment on a home equity loan or home equity line of credit may be an issue.
Knowledge Is Power
A loan or line of credit can be a powerful tool to prepare for the future if you do your homework and act with discipline. As you assess your situation, your options and your risk tolerance, you’ll start to see the air clearing and the best choice for you becoming more apparent. As always, if you feel like an expert opinion is needed, we're ready to help.
The Frost National Bank started in the back of a small mercantile store in San Antonio, where T.C. Frost provided Texans with the supplies they needed to prosper on the frontier. Today, Frost provides individuals and businesses with financial tools and advice to thrive in a fast-paced world. Everyone is significant, and at Frost,... show more
The WalletHub rating is comprised of reviews from both WalletHub users and ratings on other reputable websites. The rating was last updated on 09/12/2022.
2.9
74 reviews from WalletHub and across the web
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1 Star Rating
Staff kind and knowledgeable. Seem to be running that scam that Wells Fargo got in trouble for. Namely, if one has 10,000 in savings and the check you wrote for $50 on your regular account that only had $49 bounces your out lots of money
Then $35 dollars is charged to your account which pulls it down to $14 so that you have even less to pay the nect checks coming in
No email to tell you to transfer money they already have in your savings. Its like they forget about the $10 in savings. Excuse the type errors as I cannot see the screen
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Donald Griswold
June 25, 2022 • @damiangris
5 Star Rating
The outstanding service provided by this bank has ensured our dreams and goals. Thankful to Scott, Nathan, and Lai-Yee. Warmest, Holly and Damian with Mobility City of Fort Worth.
Product: Frost Bank Business Services
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raramsey51
March 16, 2022 • @raramsey51
3 Star Rating
I've banked with them 30+ years. Today they refused to notarize a routine legal doc citing their "policies ". Just another bank run by lawyers who has forgotten customer service.
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Michael
February 3, 2022 • @michael_basye
5 Star Rating
Verified CustomerFrost Bank made getting a Home Equity Line of Credit, (HELOC), very simple and rewarding. They run a very tight ship and their customer service is second to none. I would recommend them to anyone that is looking to use some equity in their home for upgrade projects to seriously using Frost bank.
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Sassy06
January 9, 2022 • @Sassy06
1 Star Rating
FROST BANK approved a fake US FEDERAL Check which I have a copy of! now they have me blacklisted wanting me to pay the money back to bank! I never spent the money! they will never be able to show I spent that money 4,126! I am a 71 widow US Citizen. SUING FOR DAMAGES AND MY REPUTATION RUINED BY THIS CAN'T GET A LOAN NOTHING BECAUSE THEY DIDN'T DO THEIR JOB CORRECTLY. THIS IS ABUSE TO HARM FINANCIALLY AND MENTAL STRESS! WANT THIS TAKEN OFF MY CREDIT REPORT IMMEDIATELY HAD ENOUGH! I HAVE THE COPY OF CHECK FRONT AND BACK TO PROVE THIS! DON'T TRUST FROST BANK LIARS IN MY OPINION
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rivendellfarms1
August 1, 2021 • @rivendellfarms1
1 Star Rating
The worst bank in the state of Texas! If you are not a Cullen or a Steen you are crap to them! They have still not settled my mother's piddly estate after 18 months and now they have lost death certificates! Want me to drive 170 miles to SA & get a new one for them! They can go pound sand! They care nothing abt the little guy! Their website claims they care for one even if you are not a customer-you would have to have a couple of screws loose to bank with these people if you do not have a million dollars! That is the only way you matter to them!!
Product: Frost Bank Business Services
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kimpeterson69
June 28, 2021 • @kimpeterson69
1 Star Rating
I thought Frost was a good bank of business. Turned out to be my worst nightmare I’m on anxiety medicine because of a landlord scammed me out of $1,050 dollars I thought I would be renting. Come to find out house is for sale the bank will not give my money back. It’s like they’re believing a scammer over their customers. Not one time have asked for any information from me to support my dispute. I just drove 4.5 hours to San Antonio from Dallas, Texas to headquarters or corporate. They weren’t trying to hear it basically I submitted over a 75 document to support myself. They finally scanned them into system to someone. I asked for CEO or chairman they claim they work from home. I’ve asked for CEO email. No response I tried talking to call center 7 times within 3 weeks about this matter. So supposedly somebody supposed to call me tomorrow. I just want my account out the negative so I can close my account and throw my card in the nearest lake by my home. So if you’re considering Frost please go elsewhere to bigger banks than frost. All banks have insurance on their money. I just had a double mastectomy June 1st I had to have my 11 year old help me drive 4.5 hours. I hope they find it in their hearts to do the right thing because next I’ll be taking it the news station, protest and on all social media platforms. PLEASE RUN FROM FROST BANK. Their customer service isn’t like chase nor Wells Fargo. So whichever reviews you ready tell that is bad please take heed to them before considering opening an account with them. I’ve been with them over 3 years. I don’t want them losing millions over a 1,050 dollars. If a bank offering a service ZELLE you should honor your customer or take the feature away. A lot of banks don’t offer it probably because of the liability. Worse bank I’ve ever dealt with. If anyone else has had issues I’m opening to speaking with you maybe we can seek justice together.
Product: Frost Bank Business Services
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Geta Taar
May 15, 2021 • @getatar99
1 Star Rating
Have been banking with Frost Bank for many years and this past week they let my employer to reverse a direct deposit payment after 15 days in my account. No one asked me for my consent even it was past the five day limits they could reverse a deposit.
I am sick in bed and that was my sick day payment that I deserve.
Customer service, could not help
This bank is not a good custodian...
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sbales
March 4, 2021 • @sbales
1 Star Rating
Frost bank is a small-minded discriminating entity that should be avoided at all costs. I would give them no stars or a negative rating if possible
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rivendellfarms
November 10, 2020 • @rivendellfarms
1 Star Rating
Worse Bank in the state - my mother passed in May 2020....her estate was not a large one and our family is not prominent. My mother banked at Frost because he aunt and brother had banked there. She was sucked into Frost because of the “service” they provided. Upon her death, her bills have not been paid and estate is not settled. Now USAA is suing Frost for their unpaid bill in my mother’s account. And what makes this worse is we have a close friend who passed in August. His estate was multi millions and I talked to his widow yesterday and his estate is settled and bills are paid and new trusts set up. Her attorney has contacted me and I am going to try to go that route with a attorney representing me. Unbelievable poor service if you are an average citizen!!!
Product: Frost Bank Business Services
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