What You Should Know About a Home Equity Line
What is a Home Equity credit line?
- A personal revolving line of credit secured by your primary or secondary residence.
How may I use this credit line?
- It may be used for any consumer purpose, such as the purchase of an automobile, boat, vacation, tuition, etc.
How do I apply?
- Complete the Home Equity Loan application. From this information, we determine your qualifications and evaluate your real property.
Who is eligible?
- Any individual who owns or is buying a primary or secondary residence, providing there is sufficient equity in the property, and providing the applicant meets the Bank's credit standards.
What are the credit limits?
- The minimum credit limit is $5,000.00, and the maximum is $150,000.00, depending upon the equity in the residence and your ability to repay.
What will my interest rate be?
- The interest rate is a variable rate and is determined by the Wall Street Journal prime rate plus a margin. The margin is fixed for the life of your line. We offer multiple competitive rates depending on the loan to value (LTV) ratio you choose for your line.
What are the costs?
- The Bank of Essex will pay the fees associated with closing, such as attorney fees, recording fees, etc. You are responsible for the cost of an appraisal if required. In addition, the line must stay open for a period of 36 months from the initial date of the loan, otherwise the borrower must reimburse the Bank for all closing costs. Homeowner's insurance is required, and you are responsible for the cost.
How do I get money from my Equity Line?
- You will be provided with checks which are used to access your credit line. You simply write a check for the amount of your purchase.
What are the payments?
- Your payment will be $50.00 or 1.5% of the outstanding principal balance on your statement, whichever is greater. When your balance falls below $50.00, you will be billed for the balance in full.
Is the interest I pay on my Equity Line tax deductible reglardless of how I use the
money?
- It may be, but you should consult your tax advisor for guidance.
Is there a charge for checks?
- Your first order of 25 checks is free. You pay for all reorders. There is no monthly service charge associated with the check service.
Is there a limit on the number of checks I may write?
- No. However, you are limited by the amount of credit available on your Equity Line.
Is there a limit on the amount of each check?
- Yes. Each check must be written for no less than $200.00.
What if my checkbook is lost or stolen?
- Notify our loan department immediately.
May I stop payment on an Equity Line check?
- Yes. You will need to contact our loan department and come in to sign a stop payment request.
How do I repay an Equity Line?
- You will receive a monthly statement indicating the minimum payment due. You may mail or bring your payment to the Bank along with the top portion of your statement.
When are the payments due?
- Payments are due on the 20th day of each month. (15 days after the statement cut off date.)
May payments be automatically deducted from my checking account?
- Yes. Payments can be deducted from your checking or savings accounts. You will receive a statement each month showing the amount to be deducted and other activity.
