Contact Us
Join BayPort
MaxTax Information
MaxTax is a loan which may allow members to deduct their interest by securing their home and vehicle (or boat) as collateral.
The following information is extremely important to you regarding the Credit Union's MaxTax loan request and procedures. We are pleased you have expressed an interest in our loans and we look forward to being of service to you. Please take time to read over the following information before completing the request form. If you believe the MaxTax loan does not meet your present needs, please contact any of our Credit Union offices to discuss other options.
- The present mortgage balances on the home and the amount of the vehicle or boat loan may not exceed 80% if current 1st mortgage is not at the credit union or 90% if current 1st mortgage is at the credit, of the most recent city/county tax assessment or an appraisal that is 6 months old or less.
- The interest rates and terms for a MaxTax loan will be the same as those offered on a new loan for either a used or new vehicle or boat, unless the vehicle or boat is currently financed at the Credit Union.*
- The minimum loan will be $5,000.00. MaxTax offers a fixed rate and fixed term of repayment. Like all loans at the Credit Union, there are no prepayment penalties for early payoff. Interest is calculated daily so you only pay interest for the length of time you have the loan. You may choose to have the payment deducted directly from your paycheck or payroll deduction may be set up to handle the payments from your share account monthly.
- The Credit Union will hold the title to the vehicle or boat and a Deed of Trust against the home. If either are sold, it will be necessary for the member to contact the Credit Union Consumer Loan Department staff to receive instructions on the procedures needed.
- If you want the lien on the home released for any reason, but keep the lien on the vehicle/boat, it must be refinanced thru the Consumer Loan Department. The interest paid on the loan will no longer be considered mortgage interest and will not be deductible. In order for the Credit Union to release the Deed of Trust on the home the loan must be current, the vehicle/boat title must be perfected and the insurance on the vehicle/boat must be verified. The vehicle/boat loan has to be reevaluated and an interest rate change may occur.
Note: If your home is sold and you wish to keep the loan on the vehicle/boat, please contact the Mortgage Loan Department staff so that the lien on the home may be released before the attorney closing the transaction pays the loan off from the home proceeds.
If the vehicle/boat is sold, the indebtedness must be satisfied.
The member will be responsible for paying the release fee due the Clerk's Office for the release of the Deed of Trust on the home (currently this fee is $31.00).
Loan Application
- Loans will be made on homes located within the States of Virginia and North Carolina.
- Whether you are making a new purchase or requesting a MaxTax for an existing loan the following documents are required for processing:
- A copy of the Deed or Deed of Trust with legal description to your primary residence or vacation home for subject property only.
- Your most recent mortgage balance statement(s) showing the balance(s) owed.
- A copy of your most recent fire, homeowners and flood insurance policies. These must show the agent's name and phone number.
- If the vehicle or boat loan is made at the same time as the MaxTax loan, you will need to provide the necessary documentation for the vehicle/boat loan (purchase order, title information, etc.).
- A MaxTax Loan Request Form and closing documents must be signed by all person(s) with an ownership interest in the home. All person(s) with an ownership interest in the home must be aware of all aspects of placing a lien on the home, including the possibility of foreclosure on the home if the borrower(s) fail to fulfill all obligations on the loan.
- The borrower(s) are also advised to consult an accountant or tax advisor to determine whether the interest paid on the loan will or will not be deductible on their income taxes. The Credit Union cannot assure you that this interest is tax deductible.
- All borrowers are required to maintain adequate fire and windstorm insurance on their home, with extended coverage for the life of the MaxTax loan. Flood insurance is also required on properties that are located in Special Flood Hazard Areas as identified by the National Flood Insurance Administration. If your property requires flood insurance coverage you will be notified before the loan closes.
- If you have a home equity loan presently, you should check with the institution that holds it to be sure making the MaxTax loan is not a violation of the terms of your agreement. Some home equity lines of credit prohibit the borrower(s) from making further loans against the equity in the home.
- The MaxTax loan is unique and does not require an appraisal or an attorney to handle a title exam or closing. The Credit Union Staff in the Consumer Leading Department will handle the preparation of the necessary documents, the closing of the loan and the recording of the Deed of Trust in the respective Clerks' Offices. Due to the costs involved with this process the borrowers will be responsible for paying a $75 fee plus interest accured to date on the vehicle/boat loan, to the Credit Union when the loan closes.
- In compliance with Federal Law, any mortgage made for other than the purchase of your home, must allow a three (3) business day rescission period. This means that the borrower(s) will be asked to come to the Credit Union for the closing of the MaxTax loan and after the next three business days have passed, the proceeds of the loan will be disbursed and the lien recorded. The Credit Union is strictly prohibited from disbursing funds or recording the lien until this rescission period is fulfilled. If the borrower(s) should decide against making the loan during those three (3) days, they may do so without penalty. Further information regarding the rescission period will be provided at the loan closing.
- If you are purchasing a vehicle or boat now and wish to make the MaxTax loan, you may do so, however funds will not be available until all of the necessary requirements have been met. This may mean 3 business days before the funds can be disbursed.
- If you need the money to purchase the vehicle or boat immediately, and wish to follow the process of the MaxTax loan, you will need to complete the application and paperwork for the vehicle or boat loan to complete the purchase. Later, you may proceed with filing the request for the conversion to the MaxTax loan. When the MaxTax loan closes, the member will be responsible for paying any outstanding interest on the vehicle/boat loan at that time, as any interest accrued after that time will be mortgage interest.
