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SmartLine Home Equity Loan
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SmartLine Home Equity Loan
What it Is
SmartLine℠ has the same great features of the home equity line of credit, but now with the option to lock segments of your loan at the current rate - helping you keep track of your spending while saving money.

A SmartLine℠ Home Equity loan acts as a hybrid between a home equity line of credit (HELOC) and a fixed-rate home equity loan. It is a revolving line of credit that allows the option to "lock" segments into a fixed-rate. The interest rate tied to the line of credit may go up or down on a monthly basis, but the rate of any locked segment(s) remains the same throughout the chosen term. The amount of credit offered is based on income eligibility, the equity built up in your home and the interest rate will be determined by credit score.

Your initial SmartLine℠ Home Equity Loan rate is determined by the Loan-to-Value (LTV) - the amount you'd like to borrow vs. the value of the home and your credit score. The Credit Union offers 70%, 80%, and 90% LTV options. The lower the LTV percentage, the lower the interest rate charged on money borrowed.


Features
• Lock up to three segments per loan
• Lock $2,500 or more per segment
• Repayment terms of 12-180 months
• Replenish your credit availability with each payment
• Closing costs of $99.00 plus valuation fee (if required).
• At any given time in the draw period, up to three locked segments can be made.
• The interest rate for each lock is determined at the time of the lock.

How it works
A recent credit report or soft credit pull will be used to determine what fixed-rate you qualify for. Once determined, the Credit Union employee will set up a segment in your account. A segment must be $2,500 or more and cannot be more than the available credit limit. There is no fee for the first segment; however, you may be charged a $25 fee for each subsequent segment.

To lock a segment, contact the Credit Union by selecting this option on Computerline/mobile, visiting a branch, calling, or through eMessage Center. A fee of $25 may apply to requests to reverse a segment.

The portion of a SmartLine℠ Home Equity Loan that is not locked functions like a line of credit. The interest rate charged will be based on Prime rate published in the Wall Street Journal. This interest rate is fluid and may go up or down on a monthly basis.

Interest is only charged on funds borrowed. If you have $50,000 of available credit and borrow $15,000, you will only be charged interest on the $15,000 borrowed. The additional $35,000 is available, but does not cost anything until borrowed from.

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What is a Fixed Rate Segment and why would I want that?
A Fixed Rate Segment is choosing to take a portion of your available line of credit and putting it into a fixed-rate that has a fixed monthly payment based on the term selected. The terms are a maximum 15 years or remaining term of the 25 year loan, whichever is less. A Fixed Rate segment allows a person to have a fixed-rate loan that has the same monthly payment for a specific amount of time - making budgeting easier.

For example, if you remodeled a bathroom for $10,000 and chose five years for the term of this segment, you would make 60 monthly principal and interest payments that will be fixed for the term. As you make payments on the locked segment, that money (minus interest) becomes available in the line of credit portion of your SmartLine℠ Home Equity loan.
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What are the term limits of a SmartLine℠ Home Equity Loan?
A SmartLine℠ Home Equity Loan has a term of 25 years. For the first 15 years advances may be taken from the available credit. After the advance period, there is a 10 year payback period. Once reaching the payback period, no other advances are able to be made from the SmartLine℠ Home Equity Loan. The interest rate you qualify for will be determined based on recent soft credit pull or credit report score and the amount owed will be broken down into 120 equal payments
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What happens when I make payments?
Monthly payments are required once funds are borrowed from a SmartLine℠ Home Equity Loan. If there are no locked segments, the options for repayment are either monthly payments of 1% of the amount borrowed or Interest only, if eligible. These options are available during the 15 years of advances. After the 15 years, you will have 10 years to pay off the outstanding amount borrowed.

If there is a locked segment, repayment is made by making the fixed-rate monthly payment at the rate determined at the beginning of the lock. If there are multiple locks, the monthly payment would be the sum of the fixed-rate monthly payment of each.

If there are locks and money that has been borrowed from the line of credit, the monthly payment would be the sum of the fixed-rate monthly payment plus either 1% of the amount borrowed or interest only on the amount borrowed outside of the lock.

As payments are made, these funds replenish in your line of credit minus any interest paid. The amount owed will go down and credit availability will go up.
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