Using Home Equity as a Lower Cost Way of Refinancing Your Mortgage

Reduce your monthly payments, fund major home improvements or consolidate debt with a Home Equity Rapid Refinance loan

Closing costs, rates, fixed versus adjustable, escrow accounts and more... With refinancing comes a number of factors to be considered and decisions to be made. Your Private Client Group Relationship Manager can simplify the process for you-with a Home Equity Rapid Refinance.

What is a Rapid Refinance Loan?

Rapid Refinance is a simpler, lower cost alternative to a fixed rate mortgage refinance: There is no application fee, private mortgage insurance (PMI) is not required, there is no escrow account1, and closing costs are minimal. Equal monthly payments include principal and interest. Plus... you can typically close in as little as 2-4 weeks, right at your PNC Bank branch

How Do I Know If a Rapid Refinance is Right for My Situation?

As a client of PNC's Private Client Group, you will receive my personal attention. My job as your Relationship Manager is to make banking easier for you.

I will work with you to assess your needs and circumstances, and will help you to determine whether refinancing2 is indeed the right solution. I will look at the big picture and take your entire financial situation into account, as well as your short- and long-term objectives.

For example, you may want to lower your monthly payment, pay off your mortgage more quickly with a shorter term, convert an adjustable-rate loan to a fixed-rate loan, or take advantage of low interest rates to finance a major home improvement or other expense. Also, if you only plan on living in your home a short period of time, you may not be able to recoup the costs of a refinance- though a Rapid Refinance generally does offer a shorter break- even period. I can help you to set up an automatic savings plan, too, to account for property taxes and insurance.

How Much Can I Borrow?

Rapid Refinance allows for loan sizes between $1,000 and $500,000. Banks typically set a maximum loan-to-value (LTV) limit for how much you can borrow. At PNC, the maximum allowable LTV for the home equity rapid refinance loan is 84.9%, and in some geographies and loan scenarios, it may be lower.

To figure out how much you can borrow, you must know three things:
1) your home's value, 2) the sum of all mortgage loans that you already have on the property, and 3) the maximum LTV established by your lender.

For example, let's assume a home is valued at $300,000, there are $110,000 in mortgage loans already owed on the property, and the maximum LTV is 84.9%. Just multiply the home's value ($300,000) by the LTV (84.9%) to calculate the maximum borrowing limit, which in this case is $254,700. Then subtract out the loans already on the property ($110,000) to know how much equity is remaining. In this example, you could borrow up to an additional $144,700.

What Will My Rate Be?

Rate is calculated based on a variety of factors, including credit qualifications, loan-to-value, loan amount and other criteria. The best available rates include a 0.25 percent discount for automatic payment from your PNC checking account

Is There a Prepayment Penalty if I Pay Off My New Home Equity Loan?

For applications submitted prior to Dec. 8, 2013, there may be a $350 prepayment penalty if you pay off your loan within 36 months of loan closing. For applications submitted on or after Dec. 8, 2013, there is no prepayment penalty imposed for paying off your home equity installment loan account at any time. However, certain closing costs may be paid by PNC on your behalf at the time of your loan closing. You may be responsible for reimbursement of those costs if you pay off your loan within 36 months of closing. If the loan is paid off 36 months after closing, repayment of these costs is not required.

Is My Interest Tax-Deductable?

Interest you pay on a loan that is secured by your primary residence may be tax-deductible. You should consult with a tax advisor to determine whether this applies to your situation.




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