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We Have FIXED Rate & VARIABLE Rate! General Information VARIABLE Rate HELOCs are priced at .50% below the prime rate as posted each month-end in the Wall Street Journal. FIXED Rate HELOCs are currently priced at 6.50% APR (Annual Percentage Rate). Questions & Answers Q: What is the HELP program? A: The HELP program is Greater Watertown Federal Credit Union Home Equity Line of Credit program. A HELP can be granted to a GWFCU member using that member's home as collateral. Q: What is the primary benefit of a HELP? A: For many people, there is a tax advantage associated with borrowing against the equity in their primary residence. You should ask your tax advisor whether and how this advantage might apply to your tax situation. Q: What can a HELP be used for? A: A HELP can be used for many common money needs. For example: home repairs, college expenses, debt consolidations and other worthwhile needs. It is important for GWFCU members to realize that they are using their home for collateral and if they are unable to repay the HELP, they could lose their home. Q: Is there a minimum and maximum line of credit? A: Yes. The minimum credit line is $15,000 and the maximum credit line is $100,000. Q: How much can a member borrow: A: The amount a member can borrow depends on two major items: a) record of repayment along with an ability to repay, and b) the equity in the house. Members approved for a HELP may be able to borrow up to 90% of the appraised value of their home minus any outstanding first mortgage.
Q: Do members need to borrow the full amount at one time? A: No. The amount approved will be an open line of credit. With a line of credit, members can borrow whatever amount they want up to the maximum credit line amount. Q: How will an open-end line of credit work? A: Members approved for the open-end line of credit will receive a book of HELP Checks to draw on the line of credit. Q: How will the HELP Checks work? A: HELP Checks work just like regular share draft checks (except a HELP Check cannot be written for less than $1.00) and a member may not exceed the maximum amount of approved credit. The amount of each check will be added to member's HELP balance. Q: What happens if a member overdraws the line of credit? A: If a member writes a check for an amount that is more than the unused amount of credit available to that member, the check will not clear (it will bounce) and GWFCU will charge the member an NSF fee. Terms to Understand Q: What does the term HELP stand for? A: The term is used as an acronym for Home Equity Line (of Credit) Program. It is an open-end line of credit that is secured by a mortgage on a member's home. Q: Why is it called an "open-end line of credit"? A: The term open-end refers to the fact that if a GWFCU member's request is granted, that member will be given a line of credit upon which they may draw any amount up to the maximum amount (with a minimum of $1.00) whenever they wish and for whatever purpose they choose. Q: Is this line of credit a revolving line? A: Yes. As a member repays a portion or all of the outstanding balance, that member is then able to borrow up to the maximum amount of the credit line again. Q: What does the term "appraised value" mean? A: Before a line of credit can be granted, a licensed appraiser must establish the market value of a member's home. This appraised value will be used to establish the maximum line of credit allowed. Q: Can a member obtain money immediately? A: No. The Truth in Lending Act gives a person 3 days from day the account was opened to cancel the credit line. For that reason, a member cannot obtain the money until that period of time has passed. Interest Rate & Payment Rate Q: What is the interest rate on GWFCU HELP? A: The interest rate (ANNUAL PERCENTAGE RATE) for GWFCU's HELP is based on the highest Prime Rate published in The Wall Street Journal less a margin of ½% (.50). Your interest rate may change monthly as a result of the prime rate changing. If the Prime Rate was a 7% then the interest rate would be 6.50% (7% - .50% = 6.50%). Q: What is the payment rate? A: The monthly payment will be determined by applying the current interest rate and calculating equal monthly payments based on the total loan balance outstanding and the remaining months of this loan which will equal 300 months less the number of months that have expired since signing this contract. After the draw period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance over 180 monthly statement periods (the "repayment period"). During the repayment period, payments will be due monthly. Your minimum monthly payment will equal 1/180th of the balance that was outstanding at the end of the draw period PLUS interest that has accrued on the remaining balance. If $10,000 is outstanding at the beginning of the repayment period (the end of the draw period), then the monthly payment during the repayment period would be 1/180th of the initial balance plus monthly accrued interest (assuming a 5% ANNUAL PERCENTAGE RATE) resulting in monthly payments of $79.09. Q: Is there a time limit on this line of credit? A: Yes. A member may draw (obtain) advances on the available line of credit for 10 years. After the draw period ends, a member will no longer be able to obtain credit advances (unless a new line of credit is established) and must repay the outstanding balance over the next 15 years. Q: Can payroll deduction be used to repay a HELP? A: Yes. A member's normal payroll deduction will be credited (added) to the member's share account and once a month a member's share account will be debited (subtracted from) to make the required monthly HELP payment. Q: Can a HELP be paid off early? A: Yes. There is no penalty for early repayment. Eligibility & Verification Q: Who is eligible for a GWFCU HELP? A: Only a member of GWFCU whose residence is in the state of Connecticut and who meets the credit requirements for the HELP is eligible. Q: Will a credit report be required? A: Yes. GWFCU will carefully review the HELP application and will draw reports from nationally recognized credit reporting agencies. Q: Will employment be verified? A: Yes. Because approval of the HELP will be based in part upon a member's ability to repay, the member's employment and amount of income will be verified. Q: Is credit life insurance available for A HELP? A: No Q: Is this insurance required in order to receive a HELP? A: No. It is not required. Q: Are there any fees charged for a HELP? A: At the time of this printing, fees for application, appraisal and closing are being waived. Check with us as to any fees which may now apply. How to Apply Q: How does a member apply for a HELP? A: Applications may be requested simply by contacting the credit union lending personnel at 860-945-0611,13. |
   
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