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Home Equity

Prosperity Bank Home Equity Review

Updated Dec 30, 2023   |   16-min read

Home equity loan

  • No LendEDU rating
  • Little information is available on the company website
  • Availability seems to be limited to Texas and Oklahoma

Prosperity Bank offers a home equity loan product for Texas and Oklahoma borrowers seeking to leverage the equity in their homes. The bank advertises competitive interest rates, flexible loan terms, and fast approval processes. 

However, our team couldn’t verify these claims due to limited transparency on Prosperity Bank’s website. We haven’t assigned Prosperity Bank an editorial rating, and it hasn’t earned a best-for designation.

This home equity loan might be suitable for current Prosperity Bank customers looking to streamline their banking and loan servicing. A rate discount with auto debit from a Prosperity Bank account could appeal to these borrowers. However, we advise remaining cautious and seeking more information from the bank, given the lack of detailed disclosure on rates, terms, and eligibility criteria.

About Prosperity Bank

Prosperity Bank aims to cater to the diverse banking needs of its customers in Texas and Oklahoma. Its portfolio includes home equity loans, credit cards, personal and business loans, auto loans, and mortgages. Prosperity can help homeowners in these states access their home equity, although its website offers few specifics about this service.

Prosperity Bank markets itself on the promise of competitive interest rates and flexible loan terms for its home equity loans, but our team found limited information to substantiate these claims. 

The absence of concrete details about loan rates, terms, and eligibility requirements on its website poses a challenge for potential borrowers seeking clarity and transparency.  Ideal customers for Prosperity Bank are likely those in the bank’s region who prefer traditional banking methods and personal interactions.

It urges customers to visit its branches, which suggests a focus on in-person service. However, for individuals who prioritize complete and easily accessible online information for financial decision-making, Prosperity Bank’s current online presence may not meet their expectations.

Prosperity Bank home equity loan at a glance

Prosperity Bank offers a standard home equity loan, but details about this product are scarce on its website. Typically, when reviewing home equity loans, we look for information on eligible properties, states, interest rates (fixed and variable), loan amounts, repayment periods, fees, and unique features.

Prosperity Bank doesn’t disclose most of these crucial details about its home equity loan.

Despite this lack of transparency, we were able to confirm the following:

  • Rate discounts: Prosperity Bank offers a rate discount of 0.125% for auto debit from a Prosperity Bank account. This also requires setting up an escrow account for property taxes and insurance.
  • Product type: The bank’s website lists home equity loans but does not appear to offer a home equity line of credit (HELOC). This is an essential distinction for borrowers exploring different home equity financing options.

We couldn’t confirm that Prosperity Bank home equity products are only available to borrowers in Texas and Oklahoma, but this seems to be the case based on third-party sources we consulted.

Given the limited online information, potential borrowers may need to contact Prosperity Bank directly or visit a branch for more comprehensive details on its home equity loan product and to confirm whether a Prosperity Bank HELOC is an option.

How does a Prosperity Bank home equity loan work?

A Prosperity Bank home equity loan allows homeowners to borrow against the equity in their home. Equity is the difference between the current market value of the property and any outstanding mortgage balance. 

It represents the portion of the home that the borrower owns outright.

We couldn’t locate details on how repayment works for Prosperity Bank’s home equity loan or how to manage the loan, whether through phone, online banking, or a mobile app, on its website.

What is the impact of your home value?

The home’s value and your available equity influence how much you can borrow. A higher home value and more equity could mean more borrowing power, provided other factors, such as your income and creditworthiness, are favorable.

Is a home appraisal required?

Prosperity Bank indicates it requires an appraisal to determine the property’s value but doesn’t make clear the specifics of the process. An appraisal assesses the home’s current market value, which affects the loan amount.

We confirmed that Prosperity Bank offers a home equity loan product, but the lack of detailed information on its website makes it challenging to understand the full scope of how the product works. We recommend that prospective borrowers contact the bank for more comprehensive information.

Who’s eligible for a Prosperity Bank home equity loan?

Prosperity Bank doesn’t specify its eligibility criteria on its website. Typical factors include the property type, the borrower’s state of residence, financial metrics, and credit history. These will likely play a significant role in determining eligibility.

The online application shows that Prosperity allows home equity loans on primary and secondary residences.

It didn’t disclose the following requirements:

  • State of residence
  • Maximum loan-to-value
  • Maximum debt-to-income (monthly debt payments divided by monthly gross income)
  • Minimum credit score
  • Minimum income

Before proceeding with this lender, we recommend contacting Prosperity Bank to clarify these requirements.

What are the costs and fees of a Prosperity Bank home equity loan?

We consider a clear understanding of lenders’ costs and fees crucial, but detailed information on Prosperity Bank’s website is limited. 

Fees and interest rates can have a massive impact on the cost of your loan. Here’s what we uncovered about Prosperity’s home equity loans and where we still have questions:

  • Rate calculation: Prosperity Bank advertises competitive interest rates but does not disclose specific rate ranges or how it calculates these rates for individual borrowers. Typically, credit score, loan-to-value ratio, and the borrower’s financial history influence rates.
  • Rate discounts: Prosperity Bank offers a rate discount for setting up autopay from a Prosperity Bank account and an escrow account for property taxes and insurance.
  • Fees: Prosperity Bank doesn’t disclose its home equity loan fees. Standard fees can include origination fees, appraisal fees, and closing costs.

For illustration, if a borrower takes a $100,000 home equity loan at 10% APR with a 10-year repayment period, the monthly payment would be around $1,322. The total cost over the life of the loan is around $158,640. You can see in this example how much rates and fees affect the total cost.

How do you repay a home equity loan from Prosperity Bank?

Prosperity Bank’s website does not provide extensive details about the repayment process, such as:

  • Repayment terms: Prosperity Bank mentions competitive interest rates and flexible loan terms but does not specify the available repayment options. Many home equity loans require fixed monthly payments over a predetermined term.
  • Early repayment: Prosperity Bank doesn’t disclose information regarding early repayment or potential penalties for prepaying the loan. Many lenders permit early loan payoff without additional charges, which can reduce the overall interest you pay.

For specific details about repayment options and terms, contact Prosperity Bank. Clear information about the repayment process is vital to understand your financial commitment.

How does your home’s value affect your terms?

Your home secures a home equity loan. So the equity in your home—calculated as the difference between the market value of your property and any outstanding mortgage balance—serves as collateral for the loan. 

The value of your home plays a crucial role in determining your eligibility and the terms the lender offers.

Here’s how home value generally affects terms:

Your home’s value can increase or decrease your equity and the amount you’re eligible to borrow.  For example, two borrowers might have 50% equity in their homes:

BorrowerHome valueEquity percentageEquity in dollarsPotential borrowing power
Alan$300,00050%⬇️ $150,000⬇️ Likely lower borrowing limit 
Brad$1 million50%⬆️ $500,000⬆️ Likely higher borrowing limit

Due to the difference in home values, Brad can likely borrow more with a home equity loan than Alan.

Like most home equity lenders, Prosperity Bank determines your home value through an appraisal.

What does Prosperity Bank’s appraisal process look like?

Prosperity Bank provides limited information on its appraisal process. We were unable to find out:

  • Duration and method: The time frame and method of Prosperity Bank’s appraisal process are unclear. Common appraisal practices in the industry involve in-person visits or virtual assessments.
  • Applicant’s role: It’s unclear what specific documents or information you should expect to provide during the appraisal process with Prosperity Bank.

We recommend contacting Prosperity Bank for more detailed information on its appraisal process and how it compares to standard industry practices.

Pros and cons of Prosperity Bank

When considering Prosperity Bank for a home equity loan, weighing its advantages and disadvantages is crucial. Here are the key pros and cons based on the limited information we obtained:

Pros

  • Rate discount for autopay

    Borrowers who set up automatic payments from a Prosperity Bank account earn a rate discount, leading to potential savings over the loan’s life.

  • Potential for secondary residence loans

    Prosperity Bank appears to offer loans for primary and secondary residences, providing flexibility for a broader range of homeowners.

  • Traditional banking approach

    For customers who prefer in-person banking, Prosperity Bank’s message encouraging borrowers to visit a local branch might be a welcome alternative to online-only lenders.

Cons

  • Lack of transparency

    Prosperity Bank’s website offers limited information on home equity loan rates, terms, and eligibility criteria, making it challenging for borrowers to make informed decisions.

  • Unclear appraisal process

    The details of the appraisal process are not well-outlined, which is critical for understanding the value of the property and the loan amount.

  • Availability may be limited

    Our research indicated Prosperity Bank’s personal banking solutions are available to residents of Oklahoma and Texas. Still, we couldn’t confirm whether it requires properties to be in these states for home equity loans.

  • Limited online capabilities

    For those who prefer managing their loans online, the lack of clear digital management tools or a robust online presence may be a drawback.

Prosperity Bank might offer appealing features, including its rate discount for autopay and the potential to finance secondary residences. 

However, its significant lack of transparency on crucial loan details is challenging. The limited information on rates repayment options may hinder a borrower’s ability to understand the financial implications of their loan.

Prosperity Bank could improve by enhancing its online information transparency and digital loan management capabilities.

Several competitors we’ve reviewed offer more transparent information and more user-friendly digital experiences:

LenderLendEDU editorial rating (out of 5)Best for
Spring EQ4.6Best home equity loan*
Discover4.2No designation
Navy Federal Credit Union4.1Best for military members

*Allows borrowers to apply for a HELOC and home equity loan with one application to compare rates and terms

These alternatives might be better options for borrowers prioritizing comprehensive online resources and transparency in their lender selection.

Is Prosperity Bank a reputable lender?

To evaluate Prosperity Bank’s reputation, we looked for customer reviews from various sources.

SourceCustomer ratingNumber of reviews
Better Business Bureau (BBB)1 out of 55

Reviews collected on December 20, 2023 

We found that Prosperity Bank has a limited online presence when it comes to customer reviews. It has no reviews on Trustpilot and has not claimed its profile there. This could indicate a lack of engagement with the platform or a focus on other channels for customer feedback.

BBB accreditation means a business has met the bureau’s standards of trustworthiness and ethical business practices. Not being accredited doesn’t always imply unreliability, but it may be a factor for consumers seeking external validation of a company’s reputation. Prosperity is not BBB-accredited, and it’s had 14 complaints closed in the last three years.

This limitation suggests potential borrowers might want to conduct further research or seek firsthand testimonials when considering Prosperity Bank’s services.

Does Prosperity Bank have a customer service team?

Prosperity Bank’s customer service team primarily handles inquiries related to loan applications, account management, and general banking questions. Prosperity Bank encourages customers to visit its branches for more personalized assistance, especially regarding home loan options.

Prosperity Bank offers several ways for customers to reach out to its team:

  • Email: Customers can submit a “loan inquiry” through Prosperity Bank’s website, a separate process from applying for a loan.
  • Phone: The toll-free number is 1-800-657-9500. (Operating hours are not specified on the website.)
  • Mailing address: 1301 North Mechanic, El Campo, TX 77437 (main offices).
  • Branch visits: Prosperity Bank recommends visiting a branch—which seem to be limited to Texas and Oklahoma—for in-depth discussions about home loan options.

These contact methods provide multiple channels to seek assistance. Still, the lack of specified hours for phone support and details about the email response process may require patience from customers seeking timely responses.

How to apply for a Prosperity Bank home equity loan

Prosperity Bank’s application process for a home equity loan appears straightforward but offers less transparency than many other lenders. 

It’s unclear whether applying will affect your credit score or whether prequalification is possible before submitting a full application. Prequalification can be beneficial because it allows applicants to gauge their eligibility without affecting their credit score.

To apply for a home equity loan with Prosperity Bank, follow these steps:

  • Start the application: Visit Prosperity Bank’s website and click “Apply now.”
Source: Prosperity Bank
  • Loan type selection: Disclose whether you’ve recently applied with Prosperity Bank, select the type of loan you’re applying for, and indicate whether it’s for a primary residence.
Source: Prosperity Bank
  • Fill in personal information: Complete the application by providing additional personal details.
  • Gather required documents
    • A valid government, state, or nationally issued photo ID.
    • Two years of personal tax returns.
    • Two years of business tax returns, if applicable.
    • Pay stubs from the most recent 30 days for all borrowers.
    • Your most recent full bank statement from the last 60 days.
  • Submission and review: Submit your application and await a response from Prosperity Bank. The lender doesn’t specify the duration of this review process.

The application process with Prosperity Bank requires gathering a significant amount of financial documentation, which is typical for most home equity loan applications.

The lack of information on the time frame for each step and the overall duration of the process is a notable gap compared to other lenders, which often provide more detailed timelines.

What if I’m denied a home equity loan from Prosperity Bank?

If Prosperity Bank denies your application, it’s essential to understand your options. The lender should provide reasons for the denial, which can guide your next steps.

Options after denial:

  • Reapply: Depending on the reason for denial, reapplying might be an option. If the denial was due to a solvable issue, such as insufficient documentation or a temporary dip in credit score, addressing these issues could lead to a successful future application.
  • Understand denial reasons: Prosperity Bank should inform you of the specific reasons for your loan denial. Typical reasons include a low credit score, high debt-to-income ratio, insufficient home equity, or unstable employment history. This information can help you develop a plan, such as increasing your credit score, lowering your DTI, or waiting until you’ve been with your employer for a more extended period.

For specific guidance tailored to your situation, consider speaking with a financial professional or exploring lending institutions with different eligibility criteria. Understanding the reason for denial can help you improve your chances of future loan approval.

How do other home equity products compare to Prosperity Bank?

When considering Prosperity Bank’s home equity loan, it helps to understand how it stacks up against other home equity products, such as HELOCs, reverse mortgages, and cash-out refinances. Each product has unique features and serves different financial needs.

HELOC

Unlike Prosperity Bank’s home equity loan, which provides a lump sum, a HELOC offers a revolving credit line. Most HELOCs have variable interest rates, allowing for more flexible borrowing and repayment options. 

Prosperity Bank’s home equity loan is more suited for borrowers who need a specific amount upfront and prefer the stability of fixed monthly payments. (See more about how a HELOC differs from a home equity loan.)

Reverse mortgage

Reverse mortgages, aimed at older homeowners, allow them to convert part of their home equity into cash without selling their home or monthly payments. A standard home equity loan requires regular repayments.

Cash-out refinance

Cash-out refinancing involves replacing your mortgage with a new one for a larger amount than you owe, getting the difference in cash. Prosperity Bank’s home equity loan is separate from your original mortgage and is based solely on your home’s equity.

Prosperity Bank’s home equity loan provides a straightforward, lump-sum borrowing option, but other products cater to different borrower needs with varying flexibility and repayment structures. Consider their financial situation and specific needs to determine the most suitable product.

Prosperity Bank home equity loan FAQ

How long does it take to receive funds from Prosperity Bank?

Prosperity doesn’t disclose the timeline, but typically, the approval process may take several weeks, depending on the completeness of your application, the required documentation, and the bank’s assessment process. 

After approval, the time to disburse the funds can range from a few days to a couple of weeks. This period includes finalizing the loan terms, signing the agreement, and processing the disbursement. 

Do you need to tell Prosperity Bank what the funds are used for?

Prosperity Bank may inquire about the intended use of funds as part of its application process. This is a common practice among lenders to assess the risk and viability of the loan.

However, home equity loans generally offer flexibility in how you can use the funds, whether for home improvements, debt consolidation, or other significant expenses. There may be limitations, but these are typically outlined in the loan terms.

Are there any insurance requirements?

Lenders often require borrowers to have insurance policies as part of the loan agreement. This can include homeowners insurance, which provides coverage for potential damages to the property. 

The required coverage limits can vary based on the loan amount, property value, and the lender’s policies. 

We recommend reviewing or asking about Prosperity Bank’s specific insurance requirements during the application process to ensure compliance and protect your investment.

Can you back out of a home equity loan contract?

We couldn’t confirm Prosperity Bank’s policies, but backing out of a home equity loan contract often depends on the stage of the loan process. During the application process, you can generally withdraw your application without penalty. 

If you’re approved but haven’t yet received the funds, you may be able to cancel the agreement, but this could involve certain conditions or fees. Once you have the funds, backing out becomes more complex and might entail refinancing or repaying the loan according to your agreed-upon terms.