Loan and Line of Credit Home Equity
Table of Contents Welcome... 2 Your Most Valuable Asset... 2 Compare Options... 2 Home Equity Loan... 3 Home Equity Line Of Credit... 3 Who Can Get An Equity Loan?... 3 What Are The Benefits Of Service Credit Union Equity Financing?... 3 What Will An Equity Loan Cost?... 3 How Long Will It Take To Get An Equity Loan?... 3 Compute The Equity In Your Home... 4 Equity Worksheet... 4 How Do I Apply?... 4 Home Equity Checklist / Disclosure Acknowledgement... 5 Home Equity Application... 7 Borrower s Certification & Authorization... 9 Automatic Payment Form...11 1
Welcome Do you have big dreams of remodeling your house or buying a new car? What about taking a big trip... getting some new furniture... going back to school... or maybe just paying off those high interest rate credit card debts? There s an easy and affordable way to finance any or all of these things. The money you need to realize your dreams is right where you live in your home. Your Most Valuable Asset The equity you have built up in your home is probably the most valuable financial asset you have. Equity is the difference between the present market value of your home and the total of any outstanding mortgages and other liens. If you have been a homeowner for several years, there s a good chance that you have more equity in your home than you might realize. As the market value of your home increases, so does your equity. That s important because your home s equity can be used as collateral for low-cost equity financing. Two Options To Choose From At Service Credit Union, we offer two types of equity lending a fixed-rate Home Equity Loan or a variable-rate Home Equity Line of Credit. Either option may be just right for you. To determine which one best suits your needs, first determine the use of your proceeds. This will help you decide which option is right for you. 2
Compare Options Home Equity Loan A fixed-rate Home Equity Loan is the better choice when you know the total amount of money you need and want to receive this money in a lump sum. The loan will be repaid over a three to fifteen year period with fixed monthly payments *. If you like, the payments can even be deducted from your checking or savings account by automatic debit. Primary residence and second/vacation homes are eligible. Home Equity Line Of Credit A variable-rate Home Equity Line of Credit is right for you when you want cash availability. This revolving line of credit enables you to access your funds by simply writing a special Home Equity Check. (This option is available on owner-occupied property only.) You can write checks on your line of credit for up to ten years with an additional 179 month repayment period. ** The minimum monthly payment is interest only on the amount of credit you use. Although $250 is the minimum amount, you can write as many checks as you wish up to your available limit. Who can get a Home Equity Loan? Any Service Credit Union member who has established equity in their home and lives in our lending area. These loans may not be available in every state. Please ask us for details. What are the benefits of equity financing? Lots of places offer Home Equity Loans, but a Service Credit Union Home Equity Loan offers one of the lowest rates in New England. And, just as you would expect from Service Credit Union, our Home Equity Loans and Lines of Credit are available without any application fees, prepayment fees or closing costs. *** Plus, in most cases, the interest paid on a Home Equity Loan or Line of Credit is fully tax deductible up to $100,000, provided the loan does not exceed the fair market value less the outstanding mortgage. However, limitations and restrictions can apply to special situations. Please contact your tax advisor concerning your particular situation. What will an Equity Loan cost? Finance Charges As previously mentioned, you pay NO application fees and Service Credit Union pays the closing costs. *** For an Equity Loan, you receive the entire amount of the loan up front. The interest rate and payment are fixed for the life of the loan. We will be glad to provide you with figures for the loan amount and terms you have in mind. For an Equity Line of Credit, you take advances as you need them and your payment and finance charges are based on your outstanding balance. You can pay back all or part of the principal. The interest rate is variable and is based on the Prime Index Rate as published in the Wall Street Journal. The minimum monthly payment will be interest only. For example, the minimum monthly payment on a balance of $10,000 at 8% is $65.75 during the draw period. ** Aappraisal Costs When an appraisal is required, Service Credit Union will order the appraisal for no charge to you after the application has been reviewed. closing Costs At Service Credit Union, you pay NO closing costs. *** Minimum check writing amount you can write as many checks as you wish up to your available credit limit. How long will it take to get an Equity Loan? Processing your application is our first priority. You could be remodeling your house, buying a new car, starting your trip, whatever you want to do in as little as two weeks. An application is enclosed to get you started. (PLEASE NOTE: Home Equity transactions are subject to a 3-day Right of Rescission period in accordance with Federal Regulation. Loan proceeds will be disbursed after the third business day following the date of closing). The Money You Need to Realize Your Dreams is in Your Home. *Fixed Annual Percentage Rate ( APR ) is 3.547%. For example, a $20,000 3-year Fixed-Rate Home Equity Loan at 3.49% and 80% loan-to-value (LTV) results in 36 monthly payments of $585.95 with 20% down at closing for purchase transactions or a 20% equity position for refinance transactions. Payment does not include taxes and insurance premiums (property insurance required). The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply. Properties currently on the market may be subject to title, recording, settlement and appraisal fees (approximately $800). Home Equity Loan: Fixed Annual Percentage Rate ( APR ) is 5.004%. For example, a $20,000 15-year Fixed-Rate Home Equity Loan at 4.99% and 80% loan-to-value (LTV) results in 180 monthly payments of $158.04 with 20% down at closing for purchase transactions or a 20% equity position for refinance transactions. Payment does not include taxes and insurance premiums (property insurance required). The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply. Properties currently on the market may be subject to title, recording, settlement and appraisal fees (approximately $800). **Variable Annual Percentage Rate ( APR ) based on The Wall Street Journal Prime Rate ( Prime ) published on the last business day of the month (3.25% APR as of 1/1/2013). Maximum APR 17.125%. Minimum APR 3.25%. Minimum line of credit is $10,000. For example, a 10-year Home Equity Line of Credit with a balance of $10,000 at 3.25% APR (Prime +.0%) results in 120 monthly payments of $27.08. Payment does not include taxes and insurance premiums (property insurance required). The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply. Properties currently on the market may be subject to title, recording, settlement and appraisal fees (approximately $800). Property insurance may be required. ***Property insurance may be required. If your home is on the market, title, recording, settlement and appraisal fees may apply (approximately $800). 3
Equity is Your Most Valuable Financial Asset. Compute The Equity In Your Home You may borrow a percentage of the equity available in your home. To estimate the available equity use the worksheet below. Home Equity Worksheet Example ActuaL Estimated Current Market Value...$ 100,000 $ Maximum Combined Loan to Value Ratio *...x 80% x %... = $ 80,000 = $ Present Mortgage (if applicable)... $ 50,000 $ Equity Available... = $ 30,000 = $ * Choose The Combined Loan To Value Ratio That Applies: HOME HOME EQUITY LOAN HOME EQUITY LINE OF CREDIT Single Family 80% 80% 2-4 Family 75% 75% Condo 80% 80% ** 2nd/Vacation Home 75% Not Available **If primary residence does not qualify How Do I Apply? To apply choose one of the easy methods below: 1. For the quickest service, mail your completed application and documents to: Service Credit Union, Real Estate Lending Department, P.O. Box 1268, Portsmouth NH, 03802-1268. 2. Bring in your completed application and documents to any branch office. 3. Call our Real Estate Lending Department toll-free at (800) 619-6575, extension 8339 or 3569. 4
Home Equity Checklist The following information is required for all home equity borrowers: * Completed and signed application * Signed Borrower Authorization to Release Information * Copy of your most recent pay stub, or current statement for annuities, pension & social security income (as applicable) * Copy of your most recent mortgage statement (if applicable) * Copy of your most recent paid property tax bill * Copy of your recorded warranty deed or mortgage deed * Complete copies of past two years income tax returns, including all schedules, if you are self-employed or relying on rental income or income other than wages or salary, or own more than 25% of the corporation you work for * Copy of your Homeowner and Flood Insurance (if applicable) declarations page * Signed disclosure acknowledgment below if applying for a Home Equity Line of Credit * Completed, signed Automatic Payment Form Mail your application package in the postage-paid envelope provided or visit your local Service Credit Union office with your completed package. Disclosure Acknowledgment Home Equity Line of Credit I/We have received and read the HELOC Early Disclosure and What You Should Know About Home Equity Lines of Credit pamphlet, and understand its contents, as evidenced by my/our signature(s) below. Borrower s Signature Social Security Number Co-Borrower s Signature Social Security Number 5
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DEBTS: List all fixed obligations, installment accounts and revolving accounts (if more space is needed list on attached sheets.)* If no outstanding debt, list three previous credit references. Place an (*) asterisk beside all debt you would like to be paid off with loan/line proceeds. B-Borrower C-Co Borrower Creditor s Name and Address Account No. Incurred Original Amount Previous Balance Monthly Payment $ $ $ $ Amount Past Due Real Estate Autos Lien Holder: Lien Holder: Name & Address of First Lien Holder of Security Property Name & Address of Subordinate Lien Holder(s) of Security Property List Debts On Other Real Estate Owned List any additional names under which credit has previously been received: If not included in monthly mortgage payment enter the following: Monthly payment for Tax and Insurance Monthly payment for Home Owner Association dues Total Monthly Obligations IMPORTANT APPLICANT READ BEFORE SIGNING I/We apply for the loan indicated in this application which will be secured by a mortgage or deed of trust on the property described herein and represent that the property will not be used for any illegal or restricted purpose, and that all statements made in this application are true and are made for the purpose of obtaining the loan. Verification may be obtained from any source named in this application. The original or a copy of this application will be retained by the lender, even if the loan is not granted. I/We hereby consent to and authorize the lender, HUD-FHA, FNMA or FHLMC, after the giving of reasonable notice, to enter the improved property for the sole purpose of determining that the improvements specified in this application have been completed. The Lender, its agents, successors and assigns will rely on the information contained in the application and I/we have a continuing obligation to amend and/or supplement the information provided in this application if any of the material facts which I/we have represented herein should change prior to closing. I/WE UNDERSTAND THAT THE SELECTION OF A CONTRACTOR OR DEALER, ACCEPTANCE OF MATERIAL USED AND WORK PERFORMED IS MY/OUR RESPONSIBILITY. NEITHER THE LENDER, HUD-FHA, FNMA NOR FHLMC GUARANTEES THE MATERIAL OR WORKMANSHIP. I/We do or do not intend to occupy the property as my/our primary residence. I/We understand that it may be a Federal Crime punishable by fine,or imprisonment, or both, to knowingly make any false statements concerning any of the above facts as applicable under the provisions of the United States Criminal Code. Borrower s Signature Co-Borrower s Signature Information For Government Monitoring Purposes Please complete this section if you are applying for a home equity loan and any portion of the loan proceeds will be used for home-improvement purposes and/or used to payoff any portion of the purchase mortgage. The following information is requested by the Federal Government for certain types of loans related to a dwelling, in order to monitor the lender s compliance with equal credit opportunity, fair housing and home mortgage disclosure laws. You are not required to furnish this information, but are encouraged to do so. The law provides that a lender may discriminate neither on the basis of this information, nor on whether you choose to furnish it. If you furnish the information, please provide both ethnicity and race. For race, you may check more than one designation. If you do not furnish ethnicity, race, or sex, under Federal regulations, this lender is required to note the information on the basis of visual observation or surname. If you do not wish to furnish the information, please check the box below. (Lender must review the above material to assure that the disclosures satisfy all requirements to which the lender is subject under applicable state law for the particular type of loan applied for.) BORROWER I do not wish to furnish this information C0-BORROWER I do not wish to furnish this information Ethnicity: Race: Sex: Hispanic or Latino American Indian Asian or Alaskan Native Native Hawaiian or White Other Pacific Islander Female Not Hispanic or Latino Male Black or African American To Be Completed By Interviewer Ethnicity: Race: Sex: Hispanic or Latino Not Hispanic or Latino American Indian Asian or Alaskan Native Native Hawaiian or White Other Pacific Islander Female Male Black or African American This application was taken by: face to face interview by mail by telephone Interviewer Interviewer s Phone Number * Indicate by asterisk all FHA and Government Agency Loans SERVICE CREDIT UNION Name of Interviewer s Employer P.O. Box 1268 PORTSMOUTH, NH 03802 Address of Interviewer s Employer 8
Borrower s Certification and Authorization Certification The undersigned certify the following: I/We have applied for a Home Equity Loan or Line of Credit from Service Credit Union. In applying for the loan, I/we completed a loan application containing various information on the purpose of the loan, the amount and source of the down payment, employment and income information, and assets and liabilities. I/We certify that all of the information is true and complete. I/We made no misrepresentation in the loan application or other documents, nor did I/we omit any pertinent information. Your Home Can Give You the Money You Need Now. I/We understand and agree that Service Credit Union reserves the right to change the Home Equity Loan or Line of Credit review process to a full documentation program. This may include verifying the information provided on the application with the employer and/or the financial institution. I/We fully understand that it is a federal crime punishable by fine or imprisonment, or both, to knowingly make any false statements when applying for this Home Equity Loan or Line of Credit, as applicable under the provisions of Title 18, United States Code, Section 1014. AUTHORIZATION Authorization To Release Information: I/We have applied for a Home Equity Loan or Line of Credit from Service Credit Union. As part of the application process, Service Credit Union may verify information contained in my/our loan application and in other documents required in connection with the loan, either before the loan is closed or as part of its quality control program. I/We authorize you to provide to Service Credit Union, and to any investor to whom Service Credit Union may sell my/our Home Equity Loan or Line of Credit, any and all information and documentation that they request. Such information includes, but is not limited to, employment history and income; bank, money market and similar account balances; credit history; and copies of income tax returns. Service Credit Union or any investor that purchases the Home Equity Loan or Line of Credit may address this authorization to any party named in the loan applications or disclosed by any consumer credit reporting agency or similar source. A copy of this authorization may be accepted as an original. Your prompt reply to Service Credit Union or the investor that purchased the Home Equity Loan or Line of Credit is appreciated. NOTICE TO BORROWERS: This is notice to you as required by the right to Financial Privacy Act of 1978 that HUD/FHA has a right of access to financial records held by financial institutions in connection with the consideration or administration of assistance to you. Financial records involving your transaction will be available to HUD/FHA without further notice or authorization but will not be disclosed or released by this institution to another Government Agency or Department without your consent except as required or permitted by law. Borrower s Signature Social Security Number Co-Borrower s Signature Social Security Number 9
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Automatic Payment Form Home Equity Line of Credit * i/we do not want an automatic payment from my/our Service Credit Union account at this time. * Please deduct my/our monthly HELOC payment from the Service Credit Union account listed below. Share Draft Account Number: Share Account Number: PLEASE NOTE: Agreed payments cannot be established on HELOC accounts. However, principal payments may be made at any time. I/We understand that this automatically charged payment may be canceled at my/our written request. Signed Signed Entered on FICS by 11
Automatic Payment Form Please select and complete one of the options below including your signature and account number where indicated. * An automatic payment is a requirement of this loan. Please deduct my/our monthly principal and interest payment (plus the escrow amount, if applicable) each month as stated on the new loan payment form from my/our Service Credit Union: Share Draft Account Number: Share Account Number: * I/We do not want an automatic payment from my/our Service Credit Union account at this time. * Please deduct my/our monthly principal and interest payment (plus the escrow amount, if applicable) each month as stated on the new loan payment form from my/our Service Credit Union: Share Draft Account Number: Share Account Number: * Please deduct an agreed payment each month as stated on the new loan payment Form: Amount: $ Share Draft Account Number: Share Account Number: I/We understand that this automatically charged payment may be canceled at my/our written request. Signed Signed Entered on FICS by 12
P.O. Box 1268, Portsmouth, NH 03801 800.619.6575 servicecu.org federally insured by ncua FM 28-11 1/13w