Borrowing

Find answers to frequently asked questions about our products and services.


Mortgages

Q: What type of financing does SECU offer?
A: SECU offers both Conventional and FHA financing, including the following loan products:
  • Fixed Rate Mortgages, including 10, 15, 20, and 30 year mortgage
  • Adjustable Rate Mortages, including 3/1, 5/1, 7/1, and 10/1 ARMs
  • FHA Mortgages
  • 100% Financing
  • Fannie Mae HomeReady® Mortgages
  • M.D Loans –special mortgages for medical professionals
  • Jumbo Mortgages

Q: What is an Adjustable Rate Mortgage?
A: With an Adjustable Rate Mortgage, or “ARM,” your Interest rate is based on an index plus a margin. It is fixed for the initial period, such as first five years on a 5/1 ARM or the first seven years on a 7/1 ARM. The rate will then adjust each and every year thereafter. The new interest rate is based on the current index plus a margin. The rate interest is capped at 2% for each initial change, and the lifetime cap is 6% over the initial rate. Please contact us for the current index and margin.

Q: What is 100% Financing?
A: 100% financing is a mortgage product for first time buyers who have good credit but don’t have a lot of cash for a down payment or closing costs. Eligible borrowers can buy a home with a down payment of as little as 1% or $1,000 (whichever is less).

Q: Is ANY down payment required with 100% Financing?
A: You will need to pay $1,000 or 1% of the loan amount, whichever is less.

Q: Which medical professionals are eligible for the M.D. Loan?
A: Qualifying professionals include those with the following degrees. MD or DO, , DDS, DMD (Dr. of Dental Medicine), OD (Dr. of Optometry), DPM (Dr. of Podiatric Medicine), DO (Dr. of Osteopathy), RPH (Pharmacist) and DVM (Dr. of Veterinary Medicine)

Q: What sized mortgages are eligible for the M.D. Loan?
A: Loan amounts are available from $500,000 to $2,000,000.

Q: Can I speak with someone at SECU about the best mortgage for me?
A: Of course. One of our mortgage professionals would be happy to help you find the right mortgage. You may select a mortgage professional near you or complete our contact form and one will be in touch with you within 24 hours.

Q: How much money will I need at closing?
A: Closing costs vary by location, although they are generally around 5% to 6% of your loan amount for a purchase and 3% to 4% of your loan amount for a refinance. On a refinance loan, SECU allows you to roll your closing costs into your loan amount.

Q: What is the difference between a rate/term refinance and a cash-out refinance?
A: A rate/term refinance is when the member pays off an existing first lien mortgage and rolls in their closing costs. A cash-out refinance request is when the member not only pays off an existing first lien, but also wants additional funds to either pay off a second lien, consumer debt, home improvement, vacation, tuition, etc.

Q: What is a point?
A: A point is a fee, collected at closing, which the lender charges the member in order to obtain either a lower interest rate or a specific program. One point is equal to 1% of the loan amount.

Q: What is Private Mortgage Insurance (PMI)?
A: Private Mortgage Insurance is required on all conventional loans where the member either has less than 20% equity in the property, in the case of a refinance; or less than a 20% down payment, in the case of a purchase. The lender will obtain the insurance, and the fee will be included in the member's monthly mortgage payment. It insures the lender against the member's default on the loan.

Q: When is PMI required?
A: PMI is typically required when you have a conventional mortgage and make a down payment of less than 20% of the home’s purchase price or your equity will be less than 20%.

Q: How much of a down payment must I make on a home purchase?
A: With the exception of the 100% Financing Mortgage and the HomeReady Mortgage, our products typically require at least a 5% down payment from the member’s own saved funds.

Q: Can I apply for a loan before I find a property to purchase?
A: Yes, SECU is happy to work with our members to get them pre-qualified for a mortgage loan. Based on some personal information and your credit history, SECU will issue a pre-approval letter stating the sales price that the member would qualify up to and the loan program that would best suit them. The pre-approval letter and credit report are good for 120 days.

Q: If I apply for a mortgage with SECU, will I have to pay any up-front fees?
A: No, there is no application fee. SECU requires that the appraisal fee be paid at time of processing your mortgage.

Q: What is an APR?
A: The Federal Truth-in-Lending law requires that all financial institutions disclose the APR (Annual Percentage Rate) when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan.

Q: When can I lock in my interest rate and how long is it good for?
A: You are eligible to lock in your interest rate at time of application or you may choose to float the rate. Once you lock the rate, the interest rate is guaranteed for 60 days. The interest rate must be locked in at least 10 business days prior to loan closing.

Q: Can I lock in an interest rate when I get pre-approved?
A: There is no rate guarantee for a pre-approval loan request. You will be qualified at the current interest rate in effect at time of application.

Q: Does SECU finance land loans?
A: At this time, SECU does not finance raw land.

Q: Do we make our escrow payments(insurance, taxes, ground rent, etc.) through SECU?
A: Yes, SECU will require that an escrow account be set up at closing and 1/12th of the charges will be included in the monthly mortgage payment.

Q: What if my annual escrow deposits are more or less than my annual escrow bills?
A:

Each October, members that have a mortgage with an escrow account receive an Escrow Analysis statement from SECU. An Escrow Analysis is the periodic examination of escrow accounts to determine if current monthly deposits to an escrow account will provide sufficient funds to pay taxes, insurance, and other bills escrowed for when they are due.

If you have a surplus that is less than $50, we will reduce your escrow payments over the upcoming year. If you have a surplus greater than $50, we will mail you a check.

If you have a shortcoming, we will adjust the escrow portion of your payments to include 1/12 of your shortage and an increase to help cover your bills next year.



Q: Can I convert an ARM to a fixed rate?
A: Not without refinancing. However, you may lock in another fixed rate term (e.g. another five years on a 5/1 ARM, another seven years on a 7/1 ARM, etc.) using our LoanFlex program. If your loan is eligible for LoanFlex, you will see a LoanFlex icon in online banking. Click on it to learn more.

Q: Does SECU offer Construction loans?
A: No, at this time SECU does not offer construction loans. All properties must be fully complete prior to any loan disbursement.

Q: What should I do if I am having trouble making my mortgage payments?

A: SECU may be able to help. Please contact us at 410-487-73289 or 800-879-7328.

We also offer members financial counseling through Accel.



Home Equity Lines of Credit


Q: What is a Home Equity Line of Credit or HELOC?

A: A HELOC works a lot like a credit card. It’s a flexible line of credit secured by your home’s equity but with a “draw” period (typically the first 15 years of a HELOC) which you may access from your available balance. You can draw at any time from this balance up to your available credit limit for things like home improvement, a medical bill or a family vacation.

Interest rates on HELOCs are usually variable rates. With a SECU HELOC, you can lock in up to three fixed rate, fixed payment sub-accounts under one master line. Often the interest on a HELOC is tax deductible, although you should check with your tax advisor.


Q: Does SECU offer a fixed rate Home Equity Loan?
A: Not at this time. However, our Home Equity Line of Credit offers you the option of locking in up to three fixed rate sub-accounts under one master line of credit. This gives you the advantages of both a fixed rate/fixed term account and a revolving home equity line.

Q: What is a sub-account and why would I want one?

A: This is where you can divide up your HELOC into smaller portions which are called sub-accounts. A sub-account gives you the advantage of a fixed rate, a fixed payment, and a fixed pay off schedule. Dividing up your HELOC also makes it easier to track your money.

For example, let’s say you want to purchase an $8,000 kitchen countertop. You have a $20,000 credit limit in your HELOC and no outstanding balance. With a SECU HELOC, you can create an $8,000 sub-account and either lock in that amount at a fixed rate with fixed payments, or allow the $8,000 to remain in your variable rate outstanding balance. Either way, you’ll still have $12,000 in affordable financing that you can still access for virtually any purpose.



Q: Is there a maximum dollar amount for a sub-account?
A: No, but the total of your outstanding balance (including all sub-accounts and any revolving balance) may not exceed your total master credit limit.

Q: Is there a maximum number of sub-accounts?
A: We allow up to three fixed rate sub-accounts.

Q: Will I be billed separately for each sub-account/Do I need to make separate payments for each sub-account?
A: No. SECU will calculate one master payment for each of your sub-accounts and for any revolving balance you have outstanding. This one payment will be allocated to the appropriate sub-accounts. There is no need to individually pay each account or calculate separate payments. SECU does all that for you!

Q: What happens to extra payments? For example, if I pay $700 when the monthly amount due was $500, what happens to the extra $200?
A: The additional $200 will be applied to any outstanding balance in the revolving line unless the member requests otherwise.

Q: What APR will I receive on my sub-account?
A: New sub-accounts will receive the APR in effect at the time the member opens that sub-account. Rate qualification will be based on the LTV and credit score in effect at the time the member opened the HELOC. You can check our current APRs here.

Q: Which APR will apply to sub-accounts locked in during an intro rate period?
A: Intro rates will not apply to sub-accounts. If a sub-account is opened during an intro rate period, the APR will be that in effect at the time the sub-account is opened.

Q: How do I set up a sub-account?
A: At present, you should call SECU or visit one of our branches.

Q: Is the interest on my sub-accounts still tax deductible?
A: There should be no difference in the tax deductibility of the interest on your sub-accounts vs. the interest on your HELOC revolving balance. However, you should consult with your tax advisor regarding deductibility.

Q: Which SECU HELOCs are eligible to set up sub-accounts?
A: HELOCs resulting from applications submitted on or after October 19, 2016 are eligible for sub-accounts, provided the account and the member are in good standing.


Q: Can sub-accounts be set up at any time, even if there is already a balance on the HELOC account?
A: Members may set up a sub-account at any time but may use ONLY their available balance. Members cannot take outstanding balance and put it into a sub-account.

Q: What payment terms are available for sub-accounts?

A: It depends on the amount of your sub-account:

  • $5,000 to $9,999 for a term of 12 to 60 months
  • $10,000 to $14,999 for a term of 12 to 120 months
  • $15,000+ for a term of 12 to 180 months


Q: Can I “unlock” any of the sub-accounts and turn them back into revolving balances?
A: No. Sub-accounts are fixed rate, fixed term, fixed payment accounts. Members who want to go back to a revolving balance will need to pay off one of their sub-accounts or take out a completely new HELOC.

Q: I opened a HELOC prior to 10/19/16; can SECU set up sub-accounts for me?
A: At this time, sub-accounts are available only for new HELOCs resulting from applications submitted on or after 10/19/16.

Q: What is a pre-approval?
A: SECU renders a decision based upon information provided on the loan application. Because this decision is based upon information that has not yet been verified, it is considered a pre-approval subject to verification and/or receipt of additional information. Once all of the condition outlines in the pre-approval letter are satisfied, the loan will receive a final approval.

Q: How can I find out the status of my home equity line of credit application?
A: Call the Home Equity Department at 443-517-5676 or 800-879-7328.

Q: What is a loan to value (LTV), and how is it calculated?
A: The LTV is the relationship between the amount of the home equity loan and the value of the real estate property being pledged as collateral. For example, if you have a home that appraises for $100,000, and you have a $50,000 first mortgage and a $25,000 second mortgage, the two loans together represent a 75% loan to value.

Q: Are HELOC payments interest only?
A: No. Your monthly payments are credited towards the loan’s principal and interest.

Q: How can I increase my existing HELOC?
A: You cannot increase an existing line of credit because the loan amounts are recorded in the county real estate land records. Therefore, you would need to reapply to increase your existing line of credit to match the loan amounts to the recorded lien amounts.

Q: How much will I need at closing?
A: SECU pays all closing costs on owner occupied and second home loans up to $300,000. For all loan requests over $300,000 and on Investment/rental properties, the member will need to pay at closing and this can be done directly from the initial withdraw. For loans where SECU does pay the closing costs, you must reimburse those costs to SECU if your line of credit is paid off within 24 months of the original loan date. Closing costs generally range from $850 top $1,000 on a $20,000 line of credit.

Q: How can I close my account?
A: You may pay off your HELOC using any payment channel. You can always find the payoff amount in online banking. To close your HELOC, you must call SECU or visit a branch.

Q: How do I settle on my HELOC?
A: Once your loan is ready to close, you will meet with a SECU branch representative at a SECU branch or with a settlement notary at your home or another location of your choosing.

Q: How can I receive a payoff quote?

A: Email, call, or fax the Loan Servicing department. Other departments within SECU can receive the request, but the quotes will only be issued by Loan Servicing.

If the payoff needs to go to a third party, please fax the request to 855-308-1233 or 443-517-5850, along with the member's signature/authorization, and the following information:

  • Third party company name
  • Third party address
  • Third party phone number
  • Third party contact person (if necessary)
  • Third party fax number


Consumer Loans


Q: How can I obtain a copy of my credit report?
A: Contact any of the following credit reporting agencies to receive one free copy of your credit report each year: Experian 1-888-397-3742, Equifax 1-800-685-1111, or Trans Union 1-800-888-4213.

Q: What payment methods are available for my loan?

A: The following payment methods are available, but may vary based on loan type:

  • Automatic or one-time transfers from Online Banking
  • Internal transfer from a SECU Checking or Share Savings account
  • Monthly biller
  • Automated Clearing House (ACH) from a checking or savings account at another institution

Q: What is a co-borrower?
A: A co-borrower is someone who applies jointly for credit with the primary applicant and who is equally responsible for repayment of the loan. The payment history on the loan will affect all borrowers.

Q: Why didn’t I qualify for your lowest rate?
A: Rates are based on the credit score supplied by the credit reporting agency. Your rate may also vary based on the length of your loan or your repayment method.

Q: Does my name have to be on the account/loan to receive information regarding the status?
A: We can only release information on a loan to the borrowers or with their written permission to discuss with someone else.

Q: How do I obtain a payoff on a loan?
A: Email or call the Loan Servicing department. You can also request your payoff at any branch location, through SECU's Contact Center, or by faxing your request to 410-487-7246.


Loan Payments


Q: How can I set up an automatic payment?
A: From Your SECU Account:
Login to Online Banking and set up a Scheduled Transfer.

From Another Financial Institution:
Complete the Automatic Loan Payment Form and mail to
For Consumer Loans:
P.O. Box 6541, Greenwood Village, CO 80155
For Real Estate Loans:
P.O. Box 2092, Glen Burnie, MD 21030

Q: How can I make a payment online?
A: From Your SECU Account:
Login to Online Banking and select Transfer Funds.

From Another Financial Institution:
When setting up SECU as your payee in Bill Pay, enter the following:
SECU, P.O. Box 2172, Glen Burnie, MD 21060
Routing number: 255076753
Account number: *********

Q: Where can I mail my loan payment?
A: Standard Mail
SECU, Mail Operations
P.O. Box 2172, Glen Burnie, MD 21060

Overnight Mail
Attn: Mail Operations
971 Corporate Blvd, Linthicum, MD 21090


Q: How can I make a payment over the phone?
A: From your SECU account. Call 800-879-7328 or 410-487-7328, select the option for an Existing Loan.


Return to FAQ main page