What does Loan-to-value (LTV) ratio mean?
To calculate this ratio, you need to compare the amount you want to take out compared to the apprasial value of your home.
ex.) If you buy a house that appraises for $150,000 and put down $15,000 (10% of the appraised price) you will then need to borrow $135,000 from the bank. The loan-to-value ratio will then be 90%. The higher the LTV ratio, the greater the risk because defaults are more likely. LTV decreases as you put more down.
What is the difference between a Home Equity Loan and a Mortgage Refinance Loan?
Both of these products use the equity in your home to borrow money. But unlike a refinance, a Home Equity loan is considered a second mortgage. Home Equity loans let you borrow a lump sum amounts larger than the balance of your current mortgage because of your house's equity. You can have both a Mortgage Refinance Loan and a Home Equity Loan.
What is the purpose of this type of loan?
Borrowers can utilize these types of loans to fund home improvements, higher education, or consolidate all their debts into one easy payment.
Is Private Mortgage Insurance (PMI) required?
Credit Union ONE does not require additional PMI, but borrowers must maintain their current homeowners' insurance. A Home Equity loan is considered a second mortgage, therefore no additional PMI or escrow account is required.
Are borrowers required to have their lump sum deposited only in their CUONE account?
No, borrowers can deposit their lump sum anywhere or use the funds to pay off debt.
What other restrictions apply to this type of loan?
Primary residents of Michigan and parts of Ohio including Cuyahoga, Lake, Lucas, Sandusky, Summit, and Wood counties are eligible. Single-family homes, condominiums, and manufactured homes fall under this category. Manufactured homes require an appraisal. Credit Union One will pay for credit reports, flood determinations, tax monitoring, title searches, insurance policies, and mortgage recording. An appraisal will be paid for upfront by the borrower and refunded upon loan closing. All other fees are the responsibility of the borrowers.