Terminology
What is equity and how does it work?
equity generally represents ownership in an asset after all associated debts are paid off
as equity is earned/gained, a cx can borrow against that amount, as it is the section that they own.
Calculate the usable equity:
Primary Residence
Market Value: $250,000
Existing Liens: $150,000 mortgage
$50,000
T/F: A HELOC is considered an open ended product.
True
T/F: A HELOAN is considered an open ended product.
False
If a rate is crossed out on the rate sheet, what does this mean?
We do not offer this rate - do not quote or mention.
What is a Prime Rate?
The Prime Rate is the Annual Percentage Rate set by the Federal Reserve (FED)
A customer lives in Alabama, and has a secondary home in Montana. They would like to apply for a HELOC using the equity from the secondary home. Can we assist?
No! The property must be listed within the Regions footprint
T/F: If a customer requests a term amount that is lower than what was quoted to them, they must visit a branch to complete the application process.
FALSE!! We will put in the comments section for the pipeline manager to review with the cx.
What is the max HELOAN amount for a 2nd lien position?
$50,000
Free Space
Free Space
HELOC vs HELOAN
Home equity line of credit (revolving)
Home equity loan (installment)
T/F: We are able to provide borrowing options for a rental property.
False
T/F: All HELOCs should be submitted thru Sales & Service unless applicant is unable or unwilling to process withcomplete docs online
FALSE! Blend
HELOAN's have a __________ annual percentage rate
Fixed
When looking at the HELOC payment calculator, which figure gives you the estimated monthly payment?
First Draw Period Payment
Equity lending consists of loans and lines of credit that use ____________ as collateral
Real Estate
What is the equity formula?
(Home Value * LTV%) – Existing Liens = Equity available to borrow against, where:
Home Value is determined by customer
LTV% is determined by status of residence
Existing Liens are determined by existing mortgages/loans that customer does NOT want to pay off with proposedloan/LOC
Primary = 80%
Secondary = 75%
Variable
T/F: All HELOAN applications should be submitted in Blend if the cx is willing.
When looking at the rate sheet, the HELOC range of APR's is P + 0.50 - P + 3.75. What does this mean? How would quote this out?
This is the range of rates, p + prime rate. So it would be the prime rate plus .5 and prime rate plus 3.75 this would give you the low end and high end of the payments.
What is the difference between a 1st lien and an 2nd lien?
1st gets paid first, 2nd gets paid after the first debt is satisfied.
Ex: 1st - Mortgage 2nd- HELOC
T/F: When calculating Equity, the maximum LTV for a secondary home is 80%
FALSE - 75%
Closing costs are waived for HELOC's that are $_______ or less
$250,000
What is the maximum borrowing amount for a HELOAN?
Why would we not mention or quote out the floor rate?
The Prime rate is currently set above the floor rate