We're excited to offer a new home equity product, a HELOAN, which is a second lien adjustable rate mortgage that can help you make the most of your home equity and access more cash upfront. You can keep the favorable rate on your existing first mortgage and get a better rate than a HELOC.
Curious what a HELOAN is? Good question! Let’s break it down.
Fremont Bank’s HELOAN is a second lien home equity loan that is fixed for 7 years followed by an adjustable rate. That means for the first 7 years during your introductory period, your rate and payment won’t fluctuate. After the initial fixed rate period, the rate can adjust every 6 months based on the market. These loans are commonly known as Adjustable Rate Mortgages (ARMs), where the interest rate and payment can change periodically after the initial fixed period. In this case, after seven years.
Why would I want a HELOAN instead of a HELOC?
A HELOC (home equity line of credit) is a popular product that allows homeowners to use the existing equity of their homes for a range of reasons — for renovations or needed repairs, to pay off or consolidate debt, or for other expenses.
With a HELOC, you can continue to take equity out from your home during your draw period as long as you don’t exceed your line limit. As you repay the balance on your HELOC, you can continue to access the cash again as long as you are within the initial 10-year draw period.
With a HELOAN, all cash must be taken out initially as a lump sum payment with no future access to equity. If you have larger upfront expenses without the need to finance future expenses, it may be worth considering the HELOAN over a HELOC.
You can use our new HELOAN for the same purposes as a HELOC — any expenses you decide. The big difference is that our new HELOAN offers a lower initial rate than the rate for a HELOC and a longer fixed-rate period of 7 years. That means your payments stay both lower and consistent longer.
What are some other benefits of the HELOAN underwritten by Fremont Bank?
This new product offers No Closing Cost* or a Smart Rate flat fee at a reduced interest rate — so you can choose the closing cost structure that works for you.
HELOAN benefits:
- Consistency: Fixed interest rate for 7 years, adjustable thereafter
- Lower rate: HELOAN rates are lower than current HELOC rates
- Lump sum: Get a large one-time payment upfront
- Qualifying payment: Easier to qualify than a HELOC
- Closing cost options: No Closing Cost* or a Smart Rate flat fee for a reduced rate
Why get a home equity loan with Fremont Bank?
Our home equity loans are underwritten by Fremont Bank to our own internal standards — so you get more flexibility. Underwriting is the process of verifying all the qualifications (income, debt, assets, and details about the property) used to decide the final approval of a loan application. We take the time to evaluate your situation, consider any unique circumstances, and potentially tailor the loan to meet your financial needs.
We’ve built our 60+-year reputation on top-tier customer service and deep knowledge of the local real estate markets. We understand our clients’ needs and can customize standards accordingly.
Want to learn more?
This new product is for loans up to $500,000. It is being offered for owner-occupied, second-home, and investment properties.
* No Closing Cost loans are subject to terms and conditions of Fremont Bank’s Application Fee Agreement, which lists the specific costs and fees the borrower will not pay. An application fee may be required after a loan application is submitted, which will be refunded as a credit on your Closing Disclosure statement. Application fee is non-refundable if your loan is denied, withdrawn or does not close for any reason. Borrower is responsible for paying all fees and charges imposed by brokers or an existing third party lender (for example, payoff demand statement fee and/or a reconveyance fee) as well as any prepayment penalty imposed by any third party lender or Fremont Bank. Loans with lower nominal interest rates may be available to borrower willing to pay points and fees. Loans with points and/or fees (Closing Costs) may have a lower nominal interest rate than “No Closing Cost” loans. Discount points are a form of prepaid interest paid up front in exchange for a lower interest rate. The reduced interest rate will only save money over a long term; the longer a borrower plans to live in the home, the better the chance of reaching the “break-even” point. There are a variety of points and fee options, so please ask your loan officer about available programs to help you decide whether paying points is an option for you.
Closing costs, also known as settlement costs, are the fees you pay when obtaining your loan. Closing costs are typically about 2-5% of your loan amount and are usually paid at closing.
