Home Equity Line of Credit

Home Consumer Services Home Equity Line of Credit

We know that your home is more than just a good investment.  You work hard to take care of your home, and now your home can take care of you.  Whether you need money to make home improvements, pay for your children’s education or dream wedding, get a new set of wheels, start a family business, take a nice vacation somewhere, consolidate bills or just about anything else, use the equity in your home to borrow only what you need when you need it, up to your credit limit.  Don’t delay. Apply today and lock in one of the best rates around!

  • Low 2.99% APR for the first year, followed by the Prime Rate floating
  • Interest only for 60 months
  • 25-Year Term (5-year draw period, 20-year repayment period)
  • Maximum loan to value ratio 70%
  • No application fee, No points, No closing costs for loans up to $400,000
  • Interest may be tax deductible (check with your tax advisor for complete details)

*Limited time offer.  Subject to change or withdrawal at any time.  Loans available from $5,000 to $400,000.  No maximum loan amount for 1st lien HELOC.  Loan approval and actual terms are subject to credit approval.  For Borrowers that set up automatic payments from a Brunswick Bank and Trust account, the rate for the first year of the loan will be 2.99%.  After the first year, the rate will change to the Wall Street Journal Prime Rate, floating.  As of March 16, 2020, prime is 3.25%.  If a Borrower does not set up automatic payments, the promotional rate will not apply and the rate will be Prime, floating, from the start.  The monthly payment, principal + interest, for a $10,000 5-year fixed-rate home equity loan would be $196.90.  No closing costs on loans up to $400,000.  Property insurance required, and all loans require an appraisal.  For loans above $400,000, the Bank may require title insurance at the Borrower’s expense.  Title cost varies based on title company, property and loan amount.  Borrower permitted to shop for a title company of their choosing.  $500 prepayment penalty if HELOC is closed within 36 months of opening; $500 unused line fee if HELOC is closed without accessing funds.  Owner-occupied 1-4 family primary residences or condominiums only.  Please consult your tax advisor regarding tax deductibility of interest.

FREQUENTLY ASKED QUESTIONS ABOUT APPLYING FOR A HOME EQUITY LINE OF CREDIT

1. HOW DOES A HOME EQUITY LINE OF CREDIT WORK?

A Home Equity Line of Credit (HELOC) allows you to Borrow money against the equity in your home. You are approved for a maximum loan amount, and you can use the money as you need (known as a “draw” or “line advance”) for five years.  At the end of the five years, you will repay the outstanding balance over a 20-year term.

2. WHAT IS EQUITY?

Equity is the value in your home less any existing mortgages.

3. HOW MUCH CAN I BORROW?

Up to 70% of the value of your home if you have no other mortgages. For example: $400,000 (Value of Your Home) x 70% (Maximum loan-to-value) = $280,000* (Maximum Loan)

*Please note that you must also show enough income to support the monthly payments

OR

Up to $400,000 if you have an existing mortgage on your home

$400,000 (Value of Your Home) x 70% (Maximum loan-to-value) = $280,000

$280,000 – $170,000 (First Mortgage Balance) = $100,000* (Maximum Loan Amount)

*Please note that you must also show enough income to support the monthly payments

4. WHAT IS THE RATE ON THE LOAN?

For Borrowers that set up automatic payments from a Brunswick Bank and Trust account, the rate for the first year of the loan will be 2.99%. After the first year, the rate will change to the Wall Street Journal Prime Rate, floating.  As of March 16, 2020, prime is 3.25%.  If a Borrower does not set up automatic payments, the promotional rate will not apply and the rate will be Prime, floating from the start.

5. HOW OFTEN DOES PRIME CHANGE?

The Federal Reserve determines Prime changes.  There is not a set schedule.  For example, Prime changed:

  • 0 times in 2021
  • 2 times in 2020
  • 4 times in 2019
  • 3 times in 2018
  • 3 times in 2017
  • 1 time in 2016
  • 1 time in 2015

Before that, Prime had not changed since 2008.

6. HOW DO I REPAY THE LOAN?

For the first 5 years of the loan (the draw period), the Borrower can use and pay back the funds on the line as they choose.  The monthly payments during this period will be interest only.

After the draw period expires, the Borrower will enter the repayment period. The loan will be paid in monthly installments of principal and interest amortized over 20 years.  The payment will change if Prime changes during this term.

The total term of the loan is 25 years (5-year draw period, 20-year repayment period)

7. ARE THERE CLOSING COSTS?

The promotional HELOC has no closing costs on loans up to $400,000.  For loans above $400,000, the Bank will require title insurance at the Borrower’s expense.

If Borrower does not qualify for the promotional HELOC, the Bank has another HELOC product that has upfront closing costs for documentation ($250), appraisal ($125 to $850) and recording fees ($120 to $130).  Depending on the loan amount and the purpose of the loan, title insurance may also be required.

8. WHAT IS TITLE INSURANCE AND HOW MUCH DOES IT COST?

Title insurance is an insurance policy that protects the Bank’s lien position.  This means that if there are other mortgages that were not released or any other items that could affect the title to the property, the title company would insure the Bank against them.

The cost of title insurance varies based on the loan amount and the title company.  The

Borrower is free to use the title company of their choice.

9. ARE THERE OTHER FEES?

There is a $500 prepayment penalty if the line is paid off and closed within 36 months of

origination.  The Borrower can pay the loan down to a $0 balance without penalty as long as the line remains open.

There is a $500 unused line fee.  If the loan is originated, but the Borrower never uses the funds and then asks to close the line, the fee will be assessed.

There will also be a $50 cancellation fee to cancel the mortgage when the loan is eventually paid off.

There will be a late charge in the greater amount of $5 or 5% of the payment due in the event a payment is received more than 15 days after the due date.

10. WHAT DO I NEED TO QUALIFY FOR THE PROMOTIONAL RATE?

To qualify for the promotional HELOC, the Borrower must meet the following criteria:

  1. Loan to be secured only by Borrower’s primary residence (no rental or vacation homes)
  2. Minimum average FICO score of 680 for all applicants
  3. NO derogatory items (i.e., late payments) on any mortgage or other home loans
  4. NO bankruptcy in the past three years

11. WHAT IF I DON’T QUALIFY FOR THE PROMOTIONAL PRODUCT?

Brunswick Bank and Trust offers another HELOC product that you may apply for.  Contact the loan department for details.

12. CAN A HELOC BE USED TO PURCHASE A HOME?

Yes, Brunswick Bank and Trust offers purchase-money HELOCs, however, loans for that purpose do not qualify for our promotional rate.

13. IS THE INTEREST TAX DEDUCTIBLE?

Consult your tax advisor about the potential deductibility of Home Equity Interest

14. HOW LONG DOES THE APPLICATION PROCESS TAKE?

The speed of the application process depends on how quickly a complete application is provided.  A complete application includes:

  1. A signed and dated Home Equity Line of Credit Application
  2. 2 Years of Federal Tax Returns
  3. 2 Years of W2s
  4. One Month of Pay Stubs
  5. Three Months Bank Statements

Applicant can expect a decision on the application within 30 days of submission.  Closing can typically occur within 2 weeks of approval, barring any unforeseen delays with items like the appraisal or title insurance.

Remember, only individuals with NMLS numbers can quote rates.  If there are any other questions or issues, you can contact the following people in the loan department, (732) 247-5800:

Joe Fisher                 X0173
Serenity Capule       X0174
Jonathan Jankech   X0175
Gary Rossi                 X0178
Tim Caruso               X0570
Carl Carabelli           X0170
Keith Rada               X0171