One- to Four-Family Residential Loans. The Company generally originates residential
loans on a brokered basis, whereby loans are processed and closed by a third
party generating fee income for the Company. One- to four-family mortgage loan
originations are generally obtained from our outside and in-house loan representatives,
from existing or past customers, through advertising, and through referrals
from local real estate brokers and attorneys, and are underwritten pursuant
to our policies and standards. Generally, one- to four-family residential mortgage
loans are originated in amounts up to 80% of the lesser of the appraised value
or purchase price of the property, with private mortgage insurance required
on loans with a loan-to-value ratio in excess of 80%. Fixed-rate mortgage loans
generally are originated for terms of 10 to 40 years. Generally, all fixed-rate
residential mortgage loans are underwritten according to secondary market policies
and procedures, which allows for sale in the secondary market, consistent with
our asset-liability management and portfolio needs.
Home Equity Loans and Home Equity Lines of Credit. We also offer home equity
loans and home equity lines of credit, both of which are secured by one- to
four-family residences. The combined loan-to-value ratio for home equity loans
and equity lines of credit is generally limited to 85%. Home equity loans are
offered with fixed-rates of interest and with terms of up to 15 years. Our home
equity lines of credit have adjustable-rates of interest that are generally
equal to the prime rate, as reported in The Wall Street Journal, plus 0.50%.
Commercial Real Estate Loans. We originate commercial real estate loans, including
commercial lines of credit, generally in our primary lending market area, that
are secured by properties used for business purposes such as small office buildings,
retail facilities and owner-occupied properties. Our real estate underwriting
policies provide that such loans may be made in amounts of up to 80% of the
appraised value of the property, provided such loans comply with our loans-to-one
borrower limit for these types of loans. Our commercial real estate loans may
be made with terms of up to 10 years with an amortization of 25 years, are offered
with interest rates that are fixed or adjust periodically, and are generally
indexed to Federal Home Loan Bank of Boston borrowing rates. When possible these
loans provide for a pre-payment penalty.
One- to Four-Family Investment Property Loans. We originate commercial real
estate loans on one- to four-family investment properties. The subject properties
are non-owner occupied and are generally under a business name or in an individual’s
name in instances where an individual owns more investment property than what
is allowed under Fannie Mae guidelines. Our loans for one- to four-family investment
properties may be made with terms of up to 10 years with an amortization period
of up to 25 years, are offered with interest rates that are fixed or adjust
periodically, and are generally indexed to Federal Home Loan Bank of Boston
advance rates. When possible these loans provide for a pre-payment penalty.
Multi-Family Real Estate Loans. We originate commercial real estate loans on
multi-family properties. The subject properties are non-owner occupied rental
properties greater than four units and generally under a business name or in
an individual’s name. Our loans for multi-family real estate properties
may be made with terms of up to 10 years with an amortization of up to 25 years
and are offered with interest rates that are fixed or adjust periodically and
are generally indexed to Federal Home Loan Bank of Boston advance rates. When
possible these loans provide for a pre-payment penalty.