Commercial and Multi-family Real Estate Loans. Commercial real estate loans
are secured by improved property such as office buildings, mixed use buildings
retail stores, shopping centers, warehouses, and other non-residential buildings.
Loans secured by multi-family residential units are properties consisting of
five or more residential units. The Bank offers fully amortizing loans on commercial
and multi-family properties at loan amounts up to 75% of the appraised value
of the property. Commercial and multi-family real estate loans are generally
made at rates that adjust above the five year Federal Home Loan Bank of New
York interest rate, with terms of up to 30 years. The Bank also offers balloon
loans with fixed interest rates which generally mature in three to five years
with amortization periods up to 30 years.
Construction Loans. The Bank offers loans to finance the construction of various
types of commercial and residential properties. Construction loans to builders
generally are offered with terms of up to thirty months and interest rates tied
to the prime rate plus a margin. These loans generally are offered as adjustable
rate loans. The Bank will originate construction loans to customers provided
all necessary plans and permits are in order. Construction loan funds are disbursed
as the project progresses. The Bank also offers construction loans that convert
to a permanent mortgage on the property upon completion of the construction
and adherence to conditions established at the time the construction loan was
first approved. Terms of such permanent mortgage loans are similar to other
mortgage loans secured by similar properties, with the interest rate established
at the time of conversion.
Commercial Business Loans. The Bank offers a variety of commercial business
loans in forms of either lines of credit or term loans that are fully amortized.
Lines of credit are typically utilized for working capital purposes. These loans
are either revolving or non-revolving and provide loan terms between one to
three years. The re-payment is generally interest only and the interest rate
is adjustable based upon, the Prime Rate. Term loans are typically for purchasing
a business or equipment for a business. Term loans have loan terms between five
to twenty-five years and are fully amortizing. The interest rate is adjustable
and tied to the five year Federal Home Loan Bank of New York rate. Commercial
business loans are underwritten on the basis of the borrower’s ability
to service such debt from income. These loans are generally made to small and
mid-sized companies located within the Bank’s primary and secondary lending
areas. A commercial business loan may be secured by equipment, accounts receivable,
inventory, chattel or other assets.
Residential Lending. Residential loans are secured by one-to-four family dwellings,
condominiums and cooperative units. Residential mortgage loans are secured by
properties located in our primary lending areas of Bergen, Essex, Middlesex,
Hudson, Monmouth and Richmond Counties; adjoining counties are considered as
our secondary lending areas. We generally originate residential mortgage loans
up to 75% loan-to-value at a maximum loan amount of $3.0 million for primary
residences. Loan-to-value is based on the lesser of the appraised value or the
purchase price without the requirement of private mortgage insurance. We will
originate loans with loan to value ratios up to 90%, provided the borrower obtains
private mortgage insurance approval. We originate both fixed rate and adjustable
rate residential loans with a term of up to 30 years. We offer 15, 20, and 30
year fixed, 15/30 year balloon and 3/1, 5/1, 7/1 and 10/1 adjustable rate loans
with payments being calculated to include principal, interest, taxes and insurance.
The 3/1 and 5/1 adjustable rate loans are qualified at 2% above the start rate;
all other loans are qualified at the start rate. We have a number of correspondent
relationships with third party lenders in which we deliver closed first mortgage
loans. Our correspondent banking relationships allow us to offer customers competitive
long term fixed rate and adjustable rate loans we could not otherwise originate,
while providing the Bank a source of fee income.
Home Equity Loans and Home Equity Lines of Credit. The Bank offers home equity
loans and lines of credit that are secured by either the borrower’s primary
residence, a secondary residence or an investment. Our home equity loans can
be structured as loans that are disbursed in full at closing or as lines of
credit. Home equity lines of credit are offered with terms up to 30 years. Virtually
all of our home equity loans are originated with fixed rates of interest and
home equity lines of credit are originated with adjustable interest rates tied
to the prime rate. Home equity loans and lines of credit are underwritten under
the same criteria that we use to underwrite one to four family residential loans.
Consumer Loans. The Bank makes secured Passbook, Automobile and occasionally
unsecured consumer loans. Consumer loans generally have terms between one and
five years. They generally are made on a fixed rate basis, fully-amortizing.