Home Equity Loan

We currently offer two types of Home Equity loan products: a Home Equity Loan and a Home Equity Line-of-Credit. Our Home Equity Loan is a fixed-rate ten-year loan. The borrower takes the entire amount of the loan at disbursal. Payments are fixed for the life-of-the-loan. Our Home Equity Line-of-Credit is a variable-rate loan with a maximum pay-back term of fifteen years. Unlike the home equity loan, a credit limit is established that the borrower can then “draw” on for the first five years of the loan. The borrower only borrows as they need funds and their monthly payment is calculated on the amount actually borrowed.

Home Equity - Fixed Rate

Property Specifics - Loans are available on single-family properties and Condominiums. All properties must be the primary residence of and occupied by the owner/member. The property must also be located within the boundaries of Vermont.

Minimum and Maximum Loan Amount – The minimum loan amount of any Home Equity Loan will be $5,000. The maximum loan amount of any Home Equity Loan will be $100,000

Maximum Term – The maximum loan term is 10 years.

Loan-to-Value – The maximum Home Equity Loan amount cannot be more than 90% of the appraised value less any outstanding first mortgage.

Insurance Requirements

Homeowners Insurance – A Homeowners insurance policy must be in force naming the WRCU as the loss payee. The policy must be for the amount of the original loan balance, or the replacement value of the structure, whichever is less.
Flood – All property shall have a flood zone determination. Flood insurance must be obtained if property is determined to be in a flood zone.
Force Placed Insurance – In the event that a borrower fails to maintain either homeowners or flood insurance, then WRCU will force place the insurance with the carrier of its choice. The borrower will be responsible for the cost of this forced placed insurance.

Title Search and Opinion – A title opinion shall be prepared covering a forty-year period.

Credit Report – A Merged (residential) credit report will be obtained.

Interest Rate – The interest rate will be the fixed rate in force for WRCU Home Equity Loans at the time of closing.

Note – The Note shall become due and payable in full in the event of transfer of title.

Payments - Payments shall always be due on the same day of the month as it closes and every month thereafter on that same day.

Late Fees – A late fee will be assessed when the full amount of any monthly payment is not received by the end of fifteen (15) calendar days from the date it is due. The late fee will be 5.0% of the overdue payment.

HOME EQUITY LINE-CREDIT-LINE (HELOC)

Minimum and Maximum Loan Amount – The minimum loan amount of any HELOC will be $5,000. The maximum loan amount of any HELOC will be $100,000.

Maximum Term – The maximum loan term is 20 years. The entire outstanding balance, plus finance charges due, is payable on the 20th anniversary of the loan closing date.

Loan-to-Value – The maximum Line of Credit amount cannot be more than 90% of the appraised value less any outstanding first mortgage.

Interest Rate Change Date - The interest rate may change quarterly on the first day of each calendar quarter. This new rate will be applied to all new HELOC’s, existing HELOC balances, and future HELOC advances.

Interest Index - The "Prime" rate as published in the Wall Street Journal under the "Money Rate" section rounded up to the next highest 1/4th of one percentage point. The current "Index" rate is determined by using the "Index" rate published on, or most recently prior to, ten days before the change date.
If more than one rate is published, the index will be the higher published rate.

Interest Margin - The amount added to the “Interest Index” (Prime rate) to determine the loan interest rate is .50 percentage points (50/100th).

Interest Rate Determinations – The interest rate will be determined by calculating the “Interest Index” and adding the “Interest Margin” as prescribed above. The resulting rate will be the interest rate applied to all new HELOC’s, existing HELOC balances, and future HELOC advances.

Maximum Interest Rate - The interest rate charged under these plans will never be greater than 18%.

Minimum Interest Rate – There is no minimum interest rate.

Minimum Initial Advance - The first advance on a WRCU Home Equity LOC will not be less than $2,000.00 (two thousand dollars).

Minimum Other Advance - Any advance made subsequent to the initial advance will not be less than $500.00 (five hundred dollars).

Balance Rounded - The loan balance will be rounded to the next highest $100.00 (one hundred dollars) for calculation purposes.

Payment Rounded - The loan payment will be rounded to the next highest $10.00 (ten dollars) amount.

Draw Period (Last Advance Date) - Advances will not be made after the 5th anniversary of the first advance.

Payoff Period after Each Advance - At the time of each advance, a payoff period will be established for that credit advance. The length of the payoff period depends on the balances after each advance, as shown below:

$ 1 - 8,000 60 monthly payments (5 yr.)
$ 8,001 - 15,000 120 monthly payments (10 yr.)
$15,001 - Above 180 monthly payments (15 yr.)

However, the payoff period will always be the shorter of the time shown above or the time remaining to the maturity date of the mortgage. After an advance, the payment will be set to repay the balance within the payoff period. A change in the payment will take effect the month following the calculated payment change. This payment will remain the same unless:

A) Another credit advance is taken. After an advance, the payment will be set to repay the balance within the payoff period.

B) The annual percentage rate has increased enough that the current payment is no longer sufficient to repay the balance within the payoff period plus 12 payments. If this is true, the payment will be recalculated and set to repay the balance within the original payoff period. At a minimum, this will be verified every twelve months.

Mortgage Deed - The Mortgage Deed shall contain a due-on-sale provision.

Payments - Payments shall always be due on the 1st day of the month.

Title Search & Opinion - A title opinion for Home Equity mortgages shall be prepared covering a forty-year period.

Credit Report – A Merged (residential) credit report will be obtained.

Insurance Requirements

Homeowners Insurance – A Homeowners insurance policy must be in force naming the WRCU as the loss payee. The policy must be for the amount of the original loan balance, or the replacement value of the structure, whichever is less.
Flood – All property shall have a flood zone determination. Flood insurance must be obtained if property is determined to be in a flood zone.
Force Placed Insurance – In the event that a borrower fails to maintain either homeowners or flood insurance, then WRCU will force place the insurance with the carrier of its choice. The borrower will be responsible for the cost of this forced placed insurance.

Access – Funds can be advanced to the member after they have contacted the WRCU to request an advance.

Home Equity Loan

Home Equity - Fixed Rate

HOME EQUITY LINE-CREDIT-LINE (HELOC)

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