Frequently Asked Questions - Personal Lending

How much home can I afford?

The amount of home you can afford is based on the amount of mortgage loan you can comfortably support. Generally, the amount of mortgage you qualify for is based on three factors:

• Your monthly payments as a percentage of income.
• How much cash you have for the down payment and closing costs.
• Your credit history.

Our calculators can help you determine the monthly payments for a home loan.

Should I refinance my mortgage?

There are generally three reasons to refinance:

• Lower your monthly payments.
• Pay off your mortgage faster.
• Take cash out of your property.

Interest rates and the term of your mortgage can affect your decision.

How does a refinance closing work?

The refinance closing is handled the same way your loan was closed when you first purchased your property. After your loan is approved, you'll receive copies of documents you'll need to sign at closing. Depending on where you live, the closing takes place at the office of a closing agent or it could involve a meeting where all related parties are present.

Should I get pre-qualified for a mortgage before I shop for a home?

Getting pre-qualified for your mortgage is an important step when shopping for a home. It tells you how much home you can buy and makes applying for your mortgage easier. A mortgage pre-qualification can also give you additional leverage with a seller in negotiating the best possible terms of the sale.

How is a home equity line of credit different from a home equity loan?

Home equity credit uses the borrower's home as collateral. The three main differences are:

• Pricing. A line of credit usually has a variable interest rate while a loan may have fixed or variable interest rates.
• Access. A line of credit allows ongoing access to your money over an extended period of time. As you repay the money you've used, those funds become available for you to use again.
  
  With a home equity loan, you get the money all at once then repay it over an extended period of time. Unlike a line of credit, you do not borrow, repay and borrow the funds again.
• Payments. A home equity loan generally has fixed payments, which can make budgeting easier.
  
  A home equity line of credit generally has a variable payment during the draw period. During the repayment period, monthly payments include a fixed principal amount plus interest.

Should I choose a fixed or variable interest rate?

The answer lies in your tolerance for risk.

• A fixed interest rate provides the security of knowing what your interest rate and payment will be throughout the life of your loan.
• A variable interest rate loan may give you a lower rate and payment amount initially, with a chance that the rate and payment amount may rise or fall in the future.

How can I reduce my monthly term loan payments?

Extending the number of months you take to pay off a term loan will lower your monthly payment. However, it will take you longer to pay off the debt and your total borrowing cost may be higher. Also, the type of collateral you pledge to secure your loan may impact the interest rate.

How can I lock my interest rate?

You must complete a full mortgage application in order to lock in a rate. A Citizens Bank & Trust loan officer can help you complete the application and lock in a rate if you're ready.

What is a lock period?

A lock period refers to the amount of time prior to closing that you can secure an interest rate for your loan. Lock periods range from 30 days to more than 90 days. Generally, the longer the lock period, the more you pay in points or interest.

What do I need to apply?

This information varies depending on the credit product you are requesting. To begin the process, download and print the necessary form from the FORMS section and return the completed documents to nearest branch location. If you have any questions, you can email any of the listed loan officers or call any office for assistance.

What will my interest rate be?

Many factors are considered in determining the interest rate for your credit request such as the product type, your credit history, your overall relationship with the bank, and the product for which you're applying. Once all of the needed information is collected and reviewed, a rate can be determined.

What are the terms?

Terms will vary depending on the product you request. Once your application has been completed and reviewed, you will be notified of your terms.

What are the various closing costs involved in refinancing?

Closing costs can be divided into three main categories:

• Lender fees. Fees can include origination, points, application, credit report, and appraisal.
• Third-party fees. These fees vary by state and the actual company you select to close your loan. They can include fees for closing, title exam, title insurance, and recording.
• Pre-paid items. These are items collected at the time of closing but are not really considered costs. They include items you pay whether or not you refinance (for example, interest, taxes, and hazard insurance).

All together, closing costs typically range 2% to 3% of your loan amount. You'll be provided with an estimate of your closing costs soon after your application has been received. Any prepayment penalty on a loan being refinanced will increase the amount required to close. If there is enough equity in the home, the closing costs may be included in the new loan amount to keep your out-of-pocket costs to a minimum. The estimated closing costs will change if you change the product type or loan amount. If this should occur, be sure to ask how the changes will impact your closing costs.

Once I've been approved, how do I access my funds?

If approved, a Citizens Bank & Trust loan officer will contact you to inform you of the different methods to access your funds after loan documents are signed. These methods vary depending on the credit product.

Can I have my payment automatically deducted from my checking account?

Depending on the loan type, yes. You can set up your payment option during the loan closing process.

Will I pay any interest on my line of credit with a zero balance?

No. Interest will only accrue on outstanding balances.

Frequently Asked Questions - Business Lending

Should I choose a loan or a line of credit?

• A term loan provides financing for capital expenditures such as fixed assets and other equipment needs which are regularly amortized over a period of years (ie. 1 to 5 years).
• A line of credit gives you the flexibility and convenience of easily accessing funds whenever you need them for short term financing needs, without having to apply for a new loan.

The purpose for which you intend to utilize the funds will also help you decide which to choose. For instance, a line of credit is the perfect solution for funding short-term operating capital needs. On the other hand, a term loan is a much better financing solution than a line of credit for acquiring business equipment or vehicles.

Should I choose a fixed or variable interest rate?

The answer lies in your tolerance for risk.

• A fixed interest rate provides the security of knowing what your interest rate and payment will be throughout the life of your loan.
• A variable interest rate loan may give you a lower rate and payment amount initially, with a chance that the rate and payment amount may rise or fall in the future.

How can I reduce my monthly term loan payments?

Extending the number of months you take to pay off a term loan will lower your monthly payment. However, it will take you longer to pay off the debt and your total borrowing cost may be higher. Also, the type of collateral you pledge to secure your loan may impact the interest rate.

What is a Small Business Administration (SBA) loan?

The SBA is a federal agency that helps established businesses grow and helps new businesses get started. Citizens Bank participates with the SBA in making loans.

What do I need to apply?

This information varies depending on the credit product you are requesting. To begin the process, download and print the necessary from the FORMS section and return the completed documents to nearest branch location. If you have any questions, you can email any of the listed loan officers or call any office for assistance.

What will my interest rate be?

Many factors are considered in determining the interest rate for your credit request such as the product type, your credit history, your overall relationship with the bank, and the product for which you're applying. Once all of the needed information is collected and reviewed, a rate can be determined.

What are the terms?

Terms will vary depending on the product you request. Once your application has been completed and reviewed, you will be notified of your terms.

What will my closing costs be?

Closing costs will vary depending on the type and size of your credit request. If approved, a Citizens Bank & Trust lender will usually contact you within one business day to inform you of your credit terms and conditions.

Once I've been approved, how do I access my funds?

If approved, a Citizens Bank & Trust loan officer will contact you to inform you of the different methods to access your funds after loan documents are signed. These methods vary depending on the credit product.

Can I have my payment automatically deducted from my checking account?

Yes. You can set up your payment option during the loan closing process.

Will I pay any interest on my line of credit with a zero balance?

No. Interest will only accrue on outstanding balances.

Will I need to personally guarantee the credit request?

Your personal guarantee may be requested depending on the type and size of your credit request along with some additional factors.