Home Equity Line of Credit

Our Home Equity Line-of-Credit is a variable-rate loan with a maximum final 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 ten years of the loan. The borrower only borrows as they need funds and their monthly payment is calculated on the amount actually borrowed.

WRCU also offers Home Equity Loans. Here is the difference explained for you.

Home Equity Line of Credit Details

Property Specifics – Loans are available on single-family properties and Condominiums. Mobile Homes will be considered as collateral for a home equity loan if they meet the guidelines of the WRCU Mobile Home policy. All properties will be the primary residence of and occupied by the owner/member.

Minimum and Maximum Loan Amount – The minimum loan amount of any Home Equity Line of Credit (HELOC) will be $10,000. The maximum loan amount of any HELOC will be $150,000.

Maximum Term – There is a ten-year draw period with a maximum loan term of 15 years after the end of the draw period.

Loan-to-Value (LTV) – The maximum home equity loan amount cannot be more than 90% for conventional properties, or 80% for mobile homes, of the property value as outlined in the Property Appraisals section of this policy, less any outstanding first mortgage. The LTV calculation excludes any existing mortgages, including home equities that will be paid off with the disbursal of the new home equity.

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. 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 interest margin is based on the borrower's creditworthiness and loan-to-value ratio.

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 - The interest rate charged under these plans will never be lower than 4%

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

Title Search & Opinion – A title opinion for Home Equity mortgages will be prepared covering a forty-year period. A current owners’ search can be prepared for property that the Credit Union already has a full 40-year title opinion on file for. Title insurance will be required on all loans of $50,000.01 or more.

Insurance Requirements

• Homeowners Insurance – A Homeowners insurance policy must be in force naming the WRCU as the loss payee. The policy must be for at least the amount of the loan balance. Exceptions will be reviewed and approved by the CMT or BOD. Force placing insurance will be considered to cover insurance deficiencies.
• Flood – All property will have a flood zone determination. Flood insurance must be obtained if the property is determined to be in a flood zone. The policy must be for at least the amount of the loan balance. Exceptions will be reviewed and approved by the CMT or BOD.
• 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 in the amount of the outstanding principal. The borrower will be responsible for the cost of this forced placed insurance. This insurance only protects the credit union’s interest.
• The credit union designates staff to follow-up on expired or canceled property insurance in a timely manner.

Property Appraisals

1. The town appraised value, otherwise known as the municipal assessment, or a third-party property appraisal may be used if it is less than 2 years old, or
2. The town appraised value or a third-party property appraisal, whichever is most current, that is older than 2 years old may be used if 60% or less of that value for conventional properties or 50% of that value for mobile homes is to be borrowed.
3. In order to qualify for a home equity loan between 80% and 90% loan-to-value for a conventional property, or 50% and 80% loan-to-value for a mobile home, then we must have a copy of a professional appraisal or Town Assessment performed within the last 2 years. All other policy guidelines must be met as well.

A current photo of the property must be provided for both appraisal options.

A new third party property appraisal would be required otherwise. A WRCU approved and qualified Appraiser, as defined by the NCUA and who has the correct certifications and licensing, must perform this appraisal.

Quality Control – All HELOCs will have a quality control review performed on the file after the closing. This quality control review will verify the contents of the file for the proper closing documents, correct dates and signatures and all other pertinent information as outlined in the WRCU Home Equity Loan Quality Control form. As part of the quality control function, loan officer adherence to policy and procedures, and the perfection of liens is verified.