Flexible First
Our combination financing program, Flexible First, simultaneously establishes a first mortgage with a home equity line of credit. With one application and one closing, you receive the financing you need for your home and a line of credit that is available for future expenses.
Flexible First can enable you to plan for present and future credit needs. It establishes a potentially tax-deductible1 home equity line of credit when you purchase your home, which allows you to meet personal liquidity needs such as home improvements, debt consolidation or education expenses.2
| Benefits of this solution include |
- Increased cash flow. The interest-only payment feature of a home equity line of credit and a first mortgage allows you to potentially achieve even greater payment savings.3
- Blending your rate for interest savings. Based upon the loan product selected, you may be able to lower your overall effective interest rate by dividing your non-conforming mortgage balance between a conforming first mortgage product and an adjustable-rate home equity line of credit.4
- Reducing your out-of-pocket expenses. Full closing costs are paid only on the first mortgage. In addition, Bank of America, N.A. (BANA) will pay all closing costs for credit lines up to $1,000,000.5 You may even choose to further reduce expenses by choosing the "0" point option on your first mortgage. (Click here for Important Loan-Cost Disclosures.)
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What you should know
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- There is one application and one closing for both the first mortgage and home equity line of credit.
- Financing is available for a combined mortgage amount to $3 million.5
- The program is available for one- to four-unit owner-occupied properties (excluding co-ops).
- Interest-only and amortizing payment options are available on the first mortgage.
- There are no prepayment penalties.
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1Merrill Lynch does not provide specific recommendations on tax issues. Consult your tax advisor regarding the deductibility of interest expense. Interest expense may not be deductible for all taxpayers.
2Equity Access® account funds may not be used to purchase, carry or trade securities, or to repay debt incurred to purchase, carry or trade securities.
The relative benefits of a loan for debt consolidation depend on your individual circumstances and your actual debt payments. You will realize interest payment savings when you make monthly payments towards the new, lower interest rate loan in an amount equal to or greater than what you previously paid towards the higher rate debt(s) being consolidated.
3This is an “interest-only” mortgage that allows you to pay only the interest on the money you borrow for a certain number of years. If you only pay the amount of interest that’s due, once the interest-only period ends, you will still owe the original amount you borrowed and your monthly payment will increase – even if interest rates stay the same – because you must pay back the principal as well as interest. You should ask what the payments on your loan will be after the end of the interest only period. If you are considering an adjustable-rate mortgage, ask about what your payments can be if interest rates increase.
4A conforming mortgage complies with specific Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) underwriting guidelines. These mortgages are usually for single-family homes up to $417,000 and are eligible to be sold to FNMA (HI & AK: $625,500). A non-conforming mortgage does not necessarily comply with FNMA/FHLMC, but does comply with Bank of America, N.A. (BANA) underwriting guidelines. These mortgages are usually greater than $417,000 and can be sold to investors other than FNMA.
5Combined loan amounts over $3 million may be available on a case-by-case basis to qualified applicants. Please note, minimum home equity credit line is $50,000; credit lines are available up to $1 million; credit lines larger than $1 million may be available on a case-by-case basis to qualified applicants.
BANA will pay all closing costs for credit lines up to $1,000,000. For credit lines over $1,000,000, the borrower will be responsible for all closing costs. This will include a credit report, flood determination, appraisal, recording and closing fees which will range between $330 and $3,450. In addition, the borrower will be responsible for paying title insurance that will range from $1.00 to $9.00 per $1,000 of the credit line amount and mortgage recording taxes if your property is located in AL, FL, GA, KS, LA, MD, MN, NY, OK, TN or VA that range from $1.50 to $27.50 per $1,000 of the credit line amount. Property insurance is required to establish and maintain your line of credit.
BANA reserves the right to reduce or suspend your Equity Access® credit limit in the future for reasons set forth in your loan agreement, including but not limited to a significant decline in the value of your property or a material change in your financial circumstances.