Wesleyan Mortgage Program
Effective May 25, 2005
Through June 30, 2006 the maximum mortgage available
under the new mortgage program will be $300,000. Interest rates will be set
quarterly at 80% of the current average market rate for long-term fixed
mortgages. The geographic area covered by the mortgage program includes houses
purchased within 25 aerial miles of campus. A minimum 5% down-payment is
required.
Faculty members who are at least on three-quarters time
appointments (excluding visitors and retired faculty) are eligible for one
mortgage under the current program. (An exception is made for full time
faculty who are not retired and full time staff who received a mortgage prior
to June 30, 2001. These mortgage-holders are eligible for one additional
mortgage through June 30, 2011). Staff members who are at least three-quarters
time who relocate from further away than 25 miles in order to accept a
position at Wesleyan, are also eligible to take advantage of the mortgage
program within five years of their hire date. Staff members eligible for the
program under previous guidelines will remain eligible through this current
period ending June 30, 2006.
This is a first mortgage program only and is not
available for use as a second mortgage or to refinance an existing mortgage.
For more information about the mortgage program, see details below.
If you have any questions about the program change, please contact Nathan
Peters at npeters@wesleyan.edu or X2833.
Purpose of Program
Wesleyan provides first mortgages on residential
properties for the purpose of assisting and encouraging faculty,
professional librarians, and staff to secure home ownership within reasonable commuting distance of the
campus, subject to the conditions set forth below.
Eligibility Guidelines for a Wesleyan
Mortgage
-
A borrower’s financial condition must be acceptable and their
appointment status must be for a three-quarter time or above position
(excluding visitors and retired faculty).
-
Faculty, professional librarians, or administrative staff who
were eligible for a Wesleyan mortgage prior to July 1, 2001 may obtain one new
mortgage under the program, provided they do so prior to July 1, 2011.
-
Faculty (other than visitors), professional librarians, or
administrative staff in salary grade five or higher whose appointment
commenced after June 30, 2001 are eligible for one Wesleyan provided mortgage
during their career with the university.
-
Repayment is required if the borrower ceases to be employed by
the university for any reason other than retirement, no longer maintains an
equity or legal interest in the property, or no longer uses the property as
his or her primary residence. When an event requiring repayment occurs
the employee has up to one year to pay off the mortgage and the rate
immediately increases to market levels.
-
If an employee becomes deceased, the spouse or qualified domestic
partner of the employee can continue the mortgage at its current rate as long
as he or she does not re-marry or enter a qualified domestic partner
relationship. If the spouse or qualified domestic partner is or becomes
deceased or remarries or enters into a qualified domestic partner
relationship, then there is a one-year period from the date of death or the
date of the new marriage or partnership to pay off the mortgage and the rate
immediately increases to market levels.
Location of Mortgaged Residence
The mortgaged residence must be within a 25
aerial mile radius of the campus. This circle includes New Haven and
Hartford. A map and list of localities is available on the Human Resources
web site at
http://www.wesleyan.edu/hr/forms
Mortgage Terms
·
The maximum mortgage
provided by the university is $300,000.
·
The minimum down payment
required is 5% of the purchase price of the house. For houses priced in excess
of $315,000, the minimum down payment required is the difference between the
purchase price and $300,000. Borrowers who are purchasing a new house and
selling a house currently financed by a Wesleyan mortgage are expected to apply
a significant portion (typically 80%) of the equity realized from the sale of
their current house as a down payment on the purchase of the house financed by a
Wesleyan mortgage.
·
The interest rate charged on
the loan is 80% of the local market rate or nine percent, whichever is lower.
The local market rate is determined by averaging the 30-year, fixed rate, lowest
origination points mortgage available at several local banks and is set
quarterly. The interest rate is fixed and will not vary during the life of the
loan.
·
All mortgages are in the form of a
25-year fixed rate loan.
·
There are no points or loan
origination fees charged to the loan.
·
MortgagePayroll Deduction
payments are made by payroll deduction unless the borrower is in
retirement status and no longer receiving payments from the university.
·
A university mortgage is available
for new construction, however the funds are not available until the house
is completed and the certificate of occupancy is received.
Other Mortgage Limitations
-
All owners of the mortgage premises shall be makers on the Note.
-
Mortgage loans are not assumable or transferable.
-
A borrower agrees to notify the university if he or she decides
to sell a property in close proximity to Wesleyan’s campus. The
university might have an interest in purchasing the property and, if so, will
notify the seller within thirty days.
-
In the event that two otherwise eligible faculty and staff share
the same residence, only one Wesleyan mortgage will be granted.
Mortgage assistance is available only for
the purchase of a primary residence. Mortgage assistance is not available
for:
-
Home improvements or renovations, even if done at the time of the
purchase of the home.
-
Re-financing of current mortgages or for mortgage financing where
no current mortgage exists or for loans where the Wesleyan employee owns less
than a 50% interest in the mortgaged premises.
-
The acquisition of investment property, including a multi-family
house even if occupied by a Wesleyan employee.
-
The university may, at its discretion, sell the mortgage to
another financial institution. If this happens, the purchaser of the
mortgage is not allowed under federal regulations to change any of the
conditions and requirements of the mortgage.
The Application Process
The loan application will be processed and
reviewed by Liberty Bank of Connecticut at its Middletown, Connecticut office,
55 High Street. The telephone number is (860) 344-7314. The borrower
will pay the processing costs including underwriting and appraisal fees and the
cost of a credit report. The borrower will also be responsible for other
typical mortgage loan requirements including, but not necessarily limited to:
title insurance, property insurance, pest and other inspections, attorney fees
(for both themselves and the university), and recording fees.
The following procedures should
be followed in obtaining a Wesleyan Home Mortgage.
1. Obtain a copy of the
Wesleyan mortgage program description, which is available from:University Program Coordinator
2. Before you contact
Liberty Bank, you will need a letter of eligibility for a Wesleyan
Mortgage, which can be obtained by contacting the Human Resource Office at
685-2100.
3. To obtain a copy of the
application and make an appointment for an initial discussion about your
financing needs, please contact one of the following Liberty Bank
representatives:
Laurie Nichols
(main bank contact)
Liberty Bank
55 High Street, Middletown , CT 06457
Voice: (860) 344-7314 Fax: (860) 638-2962
lnichols@liberty-bank.com
Matt Nawrocki
Liberty Bank
55 High Street, Middletown , CT 06457
Voice: (860) 704-2122 Fax: (860)
638-2962
mnawrocki@liberty-bank.com
Liberty Bank also conducts
seminars for home buyers. To go to the Liberty Bank web site,
click here.
4. Liberty Bank will
provide a pre-qualification mortgage letter which will document the amount
of financing you are eligible to receive. This type of document is often
required by sellers and their real estate agents.
5.
The
current rate in effect can be obtained by calling Liberty Bank. The loan
is subject to IRS rules and guidelines related to imputed interest on the
below market rate. The borrower must make a minimum down payment of 5% of
the purchase price. If you need to secure financing above the $300,000
mortgage provided by Wesleyan, the Liberty Bank representative will be
prepared to discuss various options with you. Liberty can provide a
second mortgage, in addition to the 1st mortgage from Wesleyan, as long as
the total loan-to-value ratio for both the 1st and 2nd mortgage is not
above 90%. For borrowers with financing needs substantially above
$300,000 it may be more economical to have Liberty provide the entire 1st
mortgage. Liberty will provide the various payment options for the
borrower’s consideration.
6. Attorney Vincent Marino
of Halloran and Sage in Middletown (346-8641) represents the University in
all Wesleyan-financed mortgage transactions. You may also contract with
Attorney Marino to represent you in the purchase of your home.
7. We recommend that you secure
the services of licensed real estate agent to represent you in your search
for a house. In addition to helping you find your home, the agent will be
able to help you identify steps that must be taken once an offer is
accepted.
8. Once a purchase and sales
agreement has been signed you are required to arrange for a home
inspection and, possibly, a water test. (The latter is only required when
property has a well).
9. Liberty Bank will
arrange for the property appraisal and will also complete its application
review including credit checks and employment/income verification. This
process will take from 4-6 weeks, but may vary based on the property being
appraised.
10. Liberty Bank will then
recommend to the University whether or not the loan should be approved.
11. Once the loan is approved
Wesleyan’s Office of Auxiliary Services will
contact you to sign a letter committing the University to make the
mortgage loan. You will also be required to sign a payroll deduction form
since all mortgage payments are made through payroll deduction.
12. The loan approval is valid
for 90 days from the date of commitment. A closing must occur within that
90 day period to secure the rate quoted.
13. The mortgage check will be
sent to Mr. Marino for the closing.
14. Attorneys' estimated
fees of $450.00 due Halloran and Sage LLP for representation of the
University which is your responsibility: Attorneys' fee for individual
representation is an additional $200.00; Attorneys' fee for second
mortgage financing estimated at $350.00.
Attorneys'
estimated fees of $450.00 due Halloran and Sage LLP for representation of
the University which is your responsibility: Attorneys' fee for individual
representation is an additional $200.00; Attorneys' fee for second
mortgage financing estimated at $350.00. Attorney fees including cost to
represent you in dealing with the seller $650.
Loan application review - $500 paid directly to Liberty
Appraisal fee - range of $300-$350 paid directly to Liberty
Home Inspection - paid directly to inspector, cost is around $300
Mortgage title insurance – paid through attorney with costs based upon the
amount of the mortgage; owners title insurance also available and
recommended for an additional cost.
Recording fees - estimated at $50.00
15. The application and approval process
varies, but usually is completed in 4-6 weeks.
16. If you have a Wesleyan mortgage and
refinance with a third party, you will need to notify Wesleyan’s Payroll
Office (X2670 or payroll@wesleyan.edu), to ensure that your mortgage
deduction is terminated appropriately.
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