Do you own your California residence?  Want a tax deduction on your vehicle loan?  Read on:

 

ENGINE EQUITY LOAN QUESTIONS & ANSWERS

 

 

 

 

 

Q:  How do they work?

A. They are a cross between a home equity loan and a car loan, with fewer expenses and much less hassle.  They:

  • don’t require appraisals!

  • don’t use loan-to-value ratios

  • don’t require Private Mortgage Insurance (PMI), title search fees, or points

  • cost only a flat fee of $150 (plus reconveyance—currently $45—when you pay off  the loan)

 

Q: How much are the Annual Percentage Rates (APRs) on these loans?

A:  The same as the rate you are now paying—or are about to pay—on your Cal Feminist vehicle or RV loan..  Click on Loans to see our regular vehicle loan rates.

 

Q: How do I find out if my/our California residence qualifies for a tax deduction?

A: Send or fax to your tax preparer a copy of this sheet.  Or, ask her or him, “Suppose that a lender doesn’t care about loan-to-value ratios.  Suppose that same lender doesn’t require PMI, appraisals, title-search fees, or points.  If we take out a variation on a home equity loan, how much of the loan—if any--will qualify for a tax deduction?  About how much will that save on income taxes?  Will it be enough to make up for the Engine Equity loan application fee and the reconveyance fee?”

 

Q: If my tax-preparer says, “Yes,” what are the next steps?

A:

  • apply for a regular Cal Feminist Car Loan (if you don’t already have one).  If it’s approved, use it to purchase a vehicle or refinance a vehicle loan you have with another lender.

  • about a week after your vehicle loan is funded: turn in your Engine Equity loan application

  • once your Engine Equity loan is approved: your car loan will probably stay on our books long enough for you to make one payment.  You will then sign new forms in front of a Notary Public (there is one in our building).  We’ll wait 3 days (“right of rescission”).  We’ll then refinance your weeks-old Cal Feminist vehicle loan and send the Deed of Trust to your County Recorder.  That will place a lien on your home.  We call it a “courtesy lien” because that’s what qualifies you to take a tax deduction (if you and your residence are eligible for one).

 

Q: Which properties qualify?

A: Your primary California residence:  a condo, PUD, or single-family residence.  As long as you have the loan with us, the property must be owner-occupied; if you move, one of two things will occur:  either you will have to pay the loan in full or we’ll release the lien on your home so that it will no longer qualify as a tax deduction.

 

Q: Which properties do not qualify?

A:  Undeveloped land, recreation properties, mobile homes, second homes, farm residences, residences on leaseholds, commercially property, rental/income property (even if you live in one of the units). If you’re unsure, contact us.

 

Q: How much of the $150 Engine Equity application fee can be refunded to me/us?

A: 

Amount           Will be refunded to your CFFCU savings for these reasons only:

$150                If your application is denied

$  25                On the date we fund your Engine Equity loan of at least $10,000

$  25                After your Engine Equity loan has been with us for at least 12 months

 

Q: What are the minimum and maximum loan amounts and terms?

A: Minimum = $5,000.  Maximum amounts:  click on Loans to see our vehicle loan terms and consult your tax advisor.  Maximum term = the remaining number of months on your new (or existing) Cal Feminist vehicle loan.

 

Q: What about other questions?

A: Ask us.  Click on How to Reach Us.

 

Rates, terms, and conditions subject to change without notice.

 

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