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You can re-order checks from within your Online Banking profile through the Service Center. If it has been a significant amount of time since your last order, you may need to contact us at 866-987-7603 or visit a branch to order your checks. This service is not currently available through the TSB Mobile App.
If you do not have enough money in your account on the “Deliver By” date, the payment will still be sent to the biller/payee and you could receive an insufficient funds charge (as disclosed in our schedule of fees.) We will try to collect payment a second time within 24-48 hours. If at that time you still do not have sufficient funds, a second insufficient funds charge may be assessed. At times, we may work with the biller/payee to try and reverse the payment. If the payment cannot be reversed, we will contact you directly to satisfy your outstanding balance. Your access to Online Bill Pay may also be restricted for payments resulting in insufficient funds.
The Service will bear responsibility for any late payment related charges up to $50.00 should a payment post after its Due Date as long as the payment was scheduled in accordance with the following guidelines:
- When scheduling Bill Payments, you must select a Scheduled Payment Date that is no later than the actual Due Date reflected on your Biller Statement unless the Due Date falls on a Non-Business Day.
- If the actual Due Date falls on a Non-Business Day, you must select a Scheduled Payment Date that is at least one (1) Business Day before the actual Due Date.
- Scheduled Payment Dates must be prior to any late date or grace period. The system will automatically show you the earliest available date for that biller/payee.
- As of December 8, 2019, all payments requiring paper checks will require 5 business days for processing, so please plan your payment requests accordingly.
The method of payment is determined by the biller/payee. Some biller/payees may also set certain dollar limits to what payments are sent electronically and what payments are sent by check. This means that your payment could be sent electronically, and other times, a payment to that same biller/payee could be sent via check. The system will also send more check payments out initially while it establishes your normal behavior. As of December 8, 2019, all payments requiring paper checks will require 5 business days for processing, so please plan your payment requests accordingly.
To help safeguard you against fraud with our enhanced Online Bill Pay, every payment is evaluated to ensure that it is within your normal behavior as well as a within the normal behavior for that biller/payee. If we have any questions regarding any of your payments, the payment may be held for 48 hours while we try to contact you for verification. If we are unable to contact you, the payment may be cancelled.
If Torrington Savings Bank fraud monitoring service suspects that a transaction might be fraudulent, you will receive an alert via push notification or email, dependent on your notification delivery method. The alert gives you two options: Fraud or Not Fraud.
What happens if I select “Fraud” on Fraud Monitoring Alert?
Your Torrington Savings Bank MasterCard Debit Card will automatically be locked out. You will then receive a call from Torrington Savings Bank’s Fraud Watch team to confirm that the transaction is indeed fraudulent.
You will receive an alert when a transaction is declined.
What if I receive a Denied Alert and the transaction is fraudulent? To report fraud please contact us at 860-496-2152 immediately.
For questions regarding Card Controls or to report fraud please contact us at 860-496-2152 or visit www.torringtonsavings.bank for more information.
To enroll your account(s) in eNotices, login to the full online banking site (not available on the mobile app) and click the “eDocuments” button at the top of the Accounts screen and follow the steps below.
- Under eNotices section, consent to accept electronic delivery of eNotices.
- Select accounts desired for eNotices.
- Once successfully enrolled, set up alerts for eNotices.
More details are available in the Customer Enrollment eNotice User Guide within Online Banking.
We are happy to provide you with Web Connect options to assist you in downloading your account data to your Quicken® or QuickBooks® program.
QuickBooks® or Quicken® Web Connect
The Web Connect service is an on demand update for your Quicken® or QuickBooks® software that is completed by you at your convenience from TSB Online Banking. Simply sign into export transactions directly from your account history and import them into your QuickBooks software. NOTE: This is the most secure process for maintaining your Quicken software as you do not have to share your internet banking User ID and Password with the Quicken® or QuickBooks® software.
QuickBooks® or Quicken® Direct Connect
Direct Connect for Quicken® or QuickBooks® software can be setup through Self-Enrollment. This may be accomplished by logging into TSB Online Banking, choose the Service Center icon, and then choosing Quicken® and QuickBooks® under the Online Banking Services option.
Torrington Savings Bank does not charge any fees when you submit an online application. Upon receipt of your online application we will prepare a loan estimate that outlines the loan terms and estimates your closing costs. You will have the opportunity to review the loan estimate and decide if you wish to proceed with the application. When you opt to proceed, you will pay the non-refundable advance fee at that time.
A home loan often involves many fees, such as the appraisal fee, title charges, closing fees, and state or local taxes. These fees vary from state to state and also from lender to lender. Any lender or broker should be able to give you an estimate of their fees, but it is more difficult to tell which lenders have done their homework and are providing a complete and accurate estimate. We take quotes very seriously. We’ve completed the research necessary to make sure that our fee quotes are accurate to the city level – and that is no easy task!
To assist you in evaluating our fees, we’ve grouped them as follows:
Third Party Fees
Fees that we consider third party fees include the appraisal fee, the credit report fee, the settlement or closing fee, the survey fee, tax service fees, title insurance fees, flood certification fees, and courier/mailing fees.
Third party fees are fees that we’ll collect and pass on to the person who actually performed the service. For example, an appraiser is paid the appraisal fee, a credit bureau is paid the credit report fee, and a title company or an attorney is paid the title insurance fees.
Typically, you’ll see some minor variances in third party fees from lender to lender since a lender may have negotiated a special charge from a provider they use often or chooses a provider that offers nationwide coverage at a flat rate. You may also see that some lenders absorb minor third party fees such as the flood certification fee, the tax service fee, or courier/mailing fees.
Taxes and other unavoidables
Fees that we consider to be taxes and other unavoidables include:
- State/Local Taxes, and
- Recording Fees
These fees will most likely have to be paid regardless of the lender you choose. If some lenders don’t quote you fees that include taxes and other unavoidable fees, don’t assume that you won’t have to pay it. It probably means that the lender who doesn’t tell you about the fee hasn’t done the research necessary to provide accurate closing costs.
Fees such as points, document preparation fees, and loan processing fees are retained by the lender and are used to provide you with the lowest rates possible. This is the category of fees that you should compare very closely from lender to lender before making a decision.
You may be asked to prepay some items at closing that will actually be due in the future. These fees are sometimes referred to as prepaid items.
One of the more common required advances is called “per diem interest” or “interest due at closing.” All of our mortgages have payment due dates of the 1st of the month. If your loan is closed on any day other than the first of the month, you’ll pay interest, from the date of closing through the end of the month, at closing. For example, if the loan is closed on June 15, we’ll collect interest from June 15 through June 30 at closing. This also means that you won’t make your first mortgage payment until August 1. This type of charge should not vary from lender to lender, and does not need to be considered when comparing lenders. All lenders will charge you interest beginning on the day the loan funds are disbursed. It is simply a matter of when it will be collected.
If an escrow or impound account will be established, you will make an initial deposit into the escrow account at closing so that sufficient funds are available to pay the bills when they become due.
If your loan requires mortgage insurance, we will arrange for the coverage during the underwriting process. Whether or not you must purchase mortgage insurance depends on the size of the down payment you make.
If your loan is a purchase, you’ll also need to pay for your first year’s homeowner’s insurance premium prior to closing. We consider this to be a required advance.
Whether you’re purchasing or refinancing, we’re certain you’ll find our service amazing! If you’ll be purchasing but haven’t found the perfect home yet, contact a loan originator and get pre-qualified so you can go house hunting with confidence.
- First, you’ll complete our online application
The application will ask you questions about the home and your finances and takes less than 20 minutes to complete.
- After completing your application, a Loan Originator will contact you to introduce himself or herself and to answer any questions you may have. Your Loan Originator is a mortgage expert and will provide help and guidance along the way.
- If you are purchasing a new home, the Loan Originator will also contact the Real Estate Broker or the seller so that they’ll know whom to contact with questions.
- We’ll send you an application package including a Loan Estimate. The application package will be sent to you and will contain papers for you to sign and a list of items we’ll need to verify the information you provided about your finances during the online application. Upon review of the loan estimate you will determine if you wish to proceed with the application; at which time you will pay the application fee.
- We’ll order the appraisal from a licensed appraiser who is familiar with home values in your area. Depending on your finances and the loan amount requested, different types of appraisals are used. Sometimes the appraiser will need to view the home. Sometimes they are able to do their evaluation from the street.
- We’ll work with your attorney to coordinate your closing date. After we have received the application package back from you and the appraisal, we will complete the underwriting of your application. When your loan is approved a commitment letter will be issued to you. If you are purchasing a home your attorney will work with the seller’s attorney to schedule the closing.
That’s all there is to it – You’re on your way to the most convenient home loan ever!
Depending on the loan product applied for, the closing will take place at the office of the buyer’s or seller’s attorney. If you are purchasing a new home, the seller may also be at the closing to transfer ownership to you. Refinances are closed at your attorney’s office and equity loans and lines are closed at the bank because an attorney is not required.
During the closing you will be reviewing and signing several loan papers. The closing attorney or bank closing agent conducting the closing should be able to answer any questions you have or you can feel free to contact your Loan Originators if you prefer.
Just to make sure there are no surprises at closing, your attorney will contact you a few days before closing to review your final fees, loan amount, first payment date, etc.
The most important documents you will be signing at the closing include:
Loan Closing Disclosure
This document provides an itemized listing of the final fees charged in connection with your loan. If your loan is a purchase, the settlement statement will also include a listing of any fees related to the transaction between you and the seller. If this loan will be a refinance, the settlement statement will show the pay off amounts of any mortgages that will be paid in full with your new loan. Most items on the statement are numbered according to a standardized system used by all lenders. These numbers will correspond to the numbers listed on the Loan Estimate that will be provided in your application package. This document is also commonly known as the closing statement and both the buyer and seller must sign this document.
Final Loan Estimate
This document provides full written disclosure of the terms and conditions of a mortgage, including the annual percentage rate (APR) and other fees. It is exactly the same as the Loan Estimate that you received immediately after your initial application, except it has been updated to reflect the final rate and fee information. Federal law requires that all lenders provide you with this document at closing.
This is the document you sign to agree to repay your mortgage. The note will provide you with all of the details of your loan including the interest rate and length of time to repay the loan. It also explains the penalties that you may incur if you fall behind in making your payments.
This document pledges a property to the lender as security for repayment of a debt. Essentially this means that you will give your property up to the lender in the event that you cannot make the mortgage payments. The Mortgage restates the basic information contained in the note, as well as details the responsibilities of the borrower.
If your loan is a refinance, Federal Law requires that you have three days to decide positively that you want a new mortgage after you sign the documents. This means that the loan funds won’t be disbursed until three business days have passed. The closing agent will provide more details at the closing.
Yes, within the Card Services section select the desired card, click on the Freeze/Unfreeze toggle to turn off the card. The Freeze/Unfreeze toggle will no longer be green. To unfreeze your debit card; click on the Freeze/Unfreeze toggle to turn the card back on and begin using you card immediately. The Freeze/Unfreeze toggle will turn green.
1. Sign in using Torrington Savings Bank’s Mobile Banking app
2. Swipe to the left, select Card Services from the menu
3. Setup your Profile Settings by clicking on Manage Profile Settings
4. Active Cards will automatically appear, click on the desired card to begin setting your card controls and alerts.
If you receive an error message that says “Bill Pay is not available,” please check to make sure we have the most up-to-date home phone and/or email address on file. You may verify this information by accessing the “Service Center” tab within Online Banking. If after verifying your information, you continue to receive an error message, please contact Customer Service at 1-866-987-7603 for assistance.
Often, only the biller/payee name and account number are required, although some do require an additional field for validation, such as ZIP or phone number.
Typically the cutoff is at 10:00 pm. Some billers have a cutoff time prior to 10:00 pm. The system will automatically show you the earliest available date for that biller/payee. As of December 8, 2019, all payments requiring paper checks will require 5 business days for processing, so please plan your payment requests accordingly.
Click the “Add a Company or Person” button from within the Payment Center and select the “Company Tab.” You can either search for the company in the “Search” bar, or you can select the company from the list of major biller/payees. When adding a major biller/payee, the biller/payee information has already been identified by the Online Bill Pay system, therefore, all you need to do is enter your account information for that major biller/payee. For smaller businesses or local businesses, the biller/payee information may not be readily available; therefore, you may need to enter more information about the business such as mailing address and phone number.
A threshold amount alert is the dollar that, if exceeded, will trigger an alert. If a transaction exceeds your defined amount, an alert will be delivered to your mobile device.
Use transaction type alerts to control which types of transactions trigger an alert. For example, if you do not often make online purchases, you could enable eCommerce to receive an alert when an enrolled card is used in an online transaction.
You will receive an alert when an enrolled card is used with specific categories of merchants, such as restaurants and department stores.
You have the ability to select alerts for all debit cards transactions or choose the types of debit card transactions you would like to receive alerts using merchant types, transaction types, threshold limit and denied transactions. You can also select none to turn off alerts; however, mandatory alerts still apply.
Turning on Device Required to require your physical device to be present to complete transaction. You will also need to click on Set Current Device as Primary in the Manage Profile Settings screen.
Please Note: Any transaction made within an 8-mile radius and the device is present that transaction should be approved. Any transaction made outside of the 8-mile radius without the device present should be declined.
What are My Regions?
My Regions allow you to assign each enrolled card to a geographical area. When a transaction is initiated, the merchant’s location will be compared to your defined Region(s). If the transaction occurs outside of your Region(s), it is denied. For example, you’ve defined your region as Connecticut and a transaction is being attempted in the state of Massachusetts, the transaction will be declined unless the merchant provided location is within your region; in that case your transaction would be approved. My Region control only applies to card present transactions and excludes card not present transactions (online or key entered). To have a transaction approved outside your set regions, you would have to either setup a new region or turn off the region control temporarily.
Where can I locate My Regions and Device Required within Card Controls?
My Regions and Device Required can be found by clicking on Locations under your desired card.
How do I create a Region?
Create a Region by zooming in and out on the map or by entering a specific Region. Although the visible area on your map is square, regions are contained within circles. This may cause areas within the corners of your map to fall outside of the Region. If this happens, edit your Region and zoom out on your map. Regions must have at least a five-mile radius.
Does my device have to be physically within a defined Region for a transaction to be approved?
No. The location of the transaction will be compared to your defined Regions, not your mobile device To have a transaction approved outside your set regions, you would have to either setup a new region or turn off the region control temporarily.
A Threshold Amount is the maximum dollar amount allowed per transaction on your desired. If a transaction exceeds your defined limit, the transaction is declined. Threshold Amounts will not increase your existing card limits which are set by Torrington Savings Bank.
Transaction Types can be used to control which types of transactions are permitted on your desired card. Transaction Types include In-Store, Online, Mail/Phone Order, Auto Pay, ATM, and Funds Transfer.
Merchant Type controls can be used to permit or restrict your desired debit card from being used with specific categories of merchants. Merchant Types include Department Stores, Entertainment, Gas Station, Groceries, Household, Personal Care, Restaurants, and Travel.
How are businesses assigned a Merchant Category?
A Merchant Category is assigned based on the merchant’s primary line of business by the Debit Card processor they use. Debit Card processors will assign businesses a single Merchant Category code based on the higher volume of service/merchandise sales.
To determine the value of the property you are purchasing or refinancing, an appraisal will be required. An appraisal report is a written description and estimate of the value of the property. National standards govern not only the format for the appraisal; they also specify the appraiser’s qualifications and credentials. In addition, most states now have licensing requirements for appraisers evaluating properties located within their states.
The appraiser will create a written report for Torrington Savings Bank and you’ll be given a copy upon receipt. You should take the time to review the report and discuss any questions or concerns with your Loan Originator.
Usually the appraiser will inspect both the interior and exterior of the home. However, in some cases, only an exterior inspection will be necessary based on the type of loan applied for. Exterior-only inspections usually save time and money, but Torrington Savings Bank only uses those for home equity loans.
After the appraiser inspects the property, they will compare the qualities of your home with other homes that have sold recently in the same neighborhood. These homes are called “comparables” and play a significant role in the appraisal process. Using industry guidelines, the appraiser will try to weigh the major components of these properties (i.e., design, square footage, number of rooms, lot size, age, etc.) to the components of your home to come up with an estimated value of your home. The appraiser adjusts the price of each comparable sale (up or down) depending on how it compares (better or worse) with your property.
As an additional check on the value of the property, the appraiser also estimates the replacement cost for the property. Replacement cost is determined by valuing an empty lot and estimating the cost to build a house of similar size and construction. Finally, the appraiser reduces this cost by an age factor to compensate for depreciation and deterioration.
If your home is for investment purposes, or is a multi-unit home, the appraiser will also consider the rental income that will be generated by the property to help determine the value.
Using these three different methods, an appraiser will frequently come up with slightly different values for the property. The appraiser uses judgment and experience to reconcile these differences and then assigns a final appraised value. The comparable sales approach is the most important valuation method in the appraisal because a property is worth only what a buyer is willing to pay and a seller is willing to accept.
It is not uncommon for the appraised value of a property to be exactly the same as the amount stated on your sales contract. This is not a coincidence, nor does it question the competence of the appraiser. Your purchase contract is the most valid sales transaction there is. It represents what a buyer is willing to offer for the property and what the seller is willing to accept. Only when the comparable sales differ greatly from your sales contract will the appraised value be very different.
In addition to verifying that your home’s value supports your loan request, we’ll also verify that your home is as marketable as others in the area. We’ll want to be confident that if you decide to sell your home, it will be as easy to market as other homes in the area.
We certainly don’t expect that you’ll default under the terms of your loan and that a forced sale will be necessary, but as the lender, we’ll need to make sure that if a sale is necessary, it won’t be difficult to find another buyer.
We’ll review the features of your home and compare them to the features of other homes in the neighborhood. For example, if your home is on a 20-acre lot, or has a large accessory building, we’ll want to make sure that there are other homes in the area on similar size lots or with similar outbuildings. It is hard to place a value on such unique features if we can’t see what other buyers are willing to pay for them. In some areas, additional acreage or outbuildings could actually be a detriment to a future sale. Finding comparable properties can be more challenging in rural areas where it is more difficult to find homes that have similar features.
We’ll also make sure that the value of your home is in the same range as other homes in the area. If the value of your home is substantially more than other homes in the neighborhood, it could affect the market acceptance of the home if you decide to sell.
We’ll also review the market statistics about your neighborhood. We’ll look at the time on the market for homes that have sold recently and verify that values are steady or increasing.
As soon as we receive your appraisal, we’ll update your loan with the estimated value of the home. As a standard practice we will provide a copy of your appraisal upon receipt.
Since the value and marketability of condominium properties is dependent on items that don’t apply to single-family homes, there are some additional steps that must be taken to determine if condominiums meet our guidelines.
One of the most important factors is determining if the project that the condominium is located in is complete. In many cases, it will be necessary for the project, or at least the phase that your unit is located in, to be complete before we can provide financing. The main reason for this is, until the project is complete, we can’t be certain that the remaining units will be of the same quality as the existing units. This could affect the marketability of your home.
In addition, we’ll consider the ratio of non-owner occupied units to owner-occupied units. This could also affect future marketability since many people would prefer to live in a project that is occupied by owners rather than renters.
We’ll also carefully review the appraisal to insure that it includes comparable sales of properties within the project, as well as some from outside the project. Our experience has found that using comparable sales from both the same project as well as other projects gives us a better idea of the condominium project’s marketability.
Depending on the percentage of the property’s value you’d like to finance, other items may also need to be reviewed.
Both a home inspection and an appraisal are designed to protect you against potential issues with your new home. Although they have totally different purposes, it makes the most sense to rely on each to help confirm that you’ve found the perfect home.
The appraiser will make note of obvious construction problems that are visible, such as leaking roofs or basements. Other obvious interior or exterior damage that could affect the salability of the property will also be reported.
However, appraisers are not construction experts and won’t find or report items that are not obvious. They won’t turn on every light switch, run every faucet or inspect the attic or mechanicals. That’s where the home inspector comes in. They generally perform a detailed inspection and can educate you about possible concerns or defects with the home.
Accompany the inspector during the home inspection. This is your opportunity to gain knowledge of major systems, appliances and fixtures, learn maintenance schedules and tips, and to ask questions about the condition of the home.
Federal Law requires all lenders to investigate whether or not each home they finance is in a special flood hazard area as defined by FEMA, the Federal Emergency Management Agency. The law can’t stop floods. Floods happen anytime, anywhere. But the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 help to ensure that you will be protected from financial losses caused by flooding.
We use a third party company who specializes in the reviewing of flood maps prepared by FEMA to determine if your home is located in a flood area. If it is, then flood insurance coverage will be required, since standard homeowner’s insurance doesn’t protect you against damages from flooding.
Licensed appraisers who are familiar with home values in your area perform appraisals. We order the appraisal as soon as the application fee is paid. Generally, it takes 10-14 days before the written report is sent to us. We follow up with the appraiser to insure that it is completed as soon as possible. If you are refinancing the appraiser should contact you to schedule a viewing appointment. If you don’t hear from the appraiser within seven days of the order date, please inform your Loan Originators. If you are purchasing a new home, the appraiser will contact the seller’s real estate agent, if they are using one, or the seller to schedule an appointment to view the home.
Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation’s central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.
Torrington Savings Bank is chartered as a mutual savings bank. This means we do not have stockholders. We take pride in our mutuality as it allows us to operate for and in the interests of our depositors. The absence of stockholders allows us to focus on serving our customers and our communities with very competitive loan rates and fees.
An adjustable rate mortgage, or an “ARM” as they are commonly called, is a loan type that offers a lower initial interest rate than most fixed rate loans. The trade off is that the interest rate can change periodically, usually in relation to an index, and the monthly payment will go up or down accordingly.
Against the advantage of the lower payment at the beginning of the loan, you should weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It’s a trade-off. You get a lower rate with an ARM in exchange for assuming more risk.
For many people in a variety of situations, an ARM is the right mortgage choice, particularly if your income is likely to increase in the future or if you only plan on being in the home for three to five years.
Here’s some detailed information explaining how ARM’s work.
With most ARMs, the interest rate and monthly payment are fixed for an initial time period such as one year, three years, five years, or seven years. After the initial fixed period, the interest rate can change every year. For example, one of our most popular adjustable rate mortgages is a five-year ARM. The interest rate will not change for the first five years (the initial adjustment period) but can change every year after the first five years.
Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease.
To determine the interest rate on an ARM, we’ll add a pre-disclosed amount to the index called the “margin.” If you’re still shopping, comparing one lender’s margin to another’s can be more important than comparing the initial interest rate, since it will be used to calculate the interest rate you will pay in the future.
An interest-rate cap places a limit on the amount your interest rate can increase or decrease. There are two types of caps:
- Periodic or adjustment caps, which limit the interest rate increase or decrease from one adjustment period to the next.
- Overall or lifetime caps, which limit the interest rate increase over the life of the loan.
As you can imagine, interest rate caps are very important since no one knows what can happen in the future. All of the ARMs Torrington Savings Bank offers have both adjustment and lifetime caps. Please see each product description for full details.
“Negative Amortization” occurs when your monthly payment changes to an amount less than the amount required to pay interest due. If a loan has negative amortization, you might end up owing more than you originally borrowed. None of the ARMs we offer allow for negative amortization.
Some lenders may require you to pay special fees or penalties if you pay off the ARM early. Torrington Savings Bank never charges a penalty for prepayment.
Selecting a mortgage may be the most important financial decision you will make and you are entitled to all the information you need to make the right decision. Don’t hesitate to contact a Loan Originators if you have questions about the features of our adjustable rate mortgages.
Points are considered a form of interest. Each point is equal to one percent of the loan amount. You pay them, up front, at your loan closing in exchange for a lower interest rate over the life of your loan. This means more money will be required at closing, however, you will have lower monthly payments over the term of your loan.
To determine whether it makes sense for you to pay points, you should compare the cost of the points to the monthly payments savings created by the lower interest rate. Divide the total cost of the points by the savings in each monthly payment. This calculation provides the number of payments you’ll make before you actually begin to save money by paying points. If the number of months it will take to recoup the points is longer than you plan on having this mortgage, you should consider the loan program option that doesn’t require points to be paid.
If you’d prefer not to make this calculation the “old-fashioned way,” we have a points calculator!
The Federal Truth in Lending law requires that all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.
Also, unfortunately, the APR doesn’t include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you’ll probably have to pay them.For adjustable rate mortgages, the APR can be even more confusing. Since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future rate adjustments.You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing the loan program that’s best for you. Look at total fees, possible rate adjustments in the future if you’re comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.Don’t forget that the APR is an effective interest rate–not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow, and the term of your loan.
Mortgage interest rate movements are as hard to predict as the stock market and no one can really know for certain whether they’ll go up or down.
If you have a hunch that rates are on an upward trend then you’ll want to consider locking the rate as soon as you are able. Before you decide to lock, make sure that your loan can close within the lock-in period. It won’t do any good to lock your rate if you can’t close during the rate lock period. If you’re purchasing a home, review your contract for the estimated closing date to help you choose the right rate lock period. If you are refinancing, in most cases, your loan could close within 30 days. However, if you have any secondary financing on the home that won’t be paid off, allow some extra time since we’ll need to contact that lender to get their permission.
If you think rates might drop while your loan is being processed, take a risk and let your rate “float” instead of locking. After you apply, you can lock in by contacting your Loan Originator by telephone.
A 15-year fixed rate mortgage gives you the ability to own your home free and clear in 15 years. And, while the monthly payments are somewhat higher than a 30-year loan, the interest rate on the 15-year mortgage is usually a little lower, and more important – you’ll pay less than half the total interest cost of the traditional 30-year mortgage.
However, if you can’t afford the higher monthly payment of a 15-year mortgage don’t feel alone. Many borrowers find the higher payment out of reach and choose a 30-year mortgage. It still makes sense to use a 30-year mortgage for most people.
The 15-year fixed rate mortgage is most popular among younger homebuyers with sufficient income to meet the higher monthly payments to pay off the house before their children start college. They own more of their home faster with this kind of mortgage, and can then begin to consider the cost of higher education for their children without having a mortgage payment to make as well. Other homebuyers, who are more established in their careers, have higher incomes and whose desire is to own their homes before they retire, may also prefer this mortgage.
Advantages and Disadvantages of a 15-Year Mortgage
The 15-year fixed rate mortgage offers two big advantages for most borrowers:
- You own your home in half the time it would take with a traditional 30-year mortgage.
- You save more than half the amount of interest of a 30-year mortgage. Lenders usually offer this mortgage at a slightly lower interest rate than with 30-year loans – typically up to .5% lower. It is this lower interest rate added to the shorter loan life that creates real savings for 15-year fixed rate borrowers.
The possible disadvantages associated with a 15-year fixed rate mortgage are:
- The monthly payments for this type of loan are roughly 10 percent to 15 percent higher per month than the payment for a 30-year.
- Because you’ll pay less total interest on the 15-year fixed rate mortgage, you won’t have the maximum mortgage interest tax deduction possible.
Compare Them Yourself
Use the “How much can I save with a 15 year mortgage?” calculator in our Resource Center to help decide which loan term is best for you.
At Torrington Savings Bank we protect your payment expectations by locking in your rate on the date of application. Locking in guards against rate increases and unexpected increases in your planned payment while your loan is in process. Your rate is protected for 60 days from the date of your application. If you are unable to close within 60 days contact your Loan Originator to discuss your needs and options.
None of the loan programs offered by Torrington Savings Bank have penalties for prepayment. You can pay off your mortgage any time with no additional charges.
The interest rate market is subject to movements without advance notice. Locking in a rate protects you from market volatility.
A lock is an agreement by the borrower and the lender and specifies the number of days for which a loan’s interest rate and points are guaranteed. Should interest rates rise during that period, you are protected from having your rate increase. Should interest rates fall during that period, the borrower must honor the lock.
When Can I Lock?
At Torrington Savings Bank we protect your payment expectations by locking in your rate on the date your application is submitted. Locking in guards against rate increases and unexpected rises in your planned payment while your loan is in process.
We do not charge a fee for locking in your interest rate for 60 days. Rate lock extensions may be offered after the expiration of the initial 60 day rate lock period for a fee. Speak with your Loan Originator should you need an extension.
We currently offer a 60 day lock-in period on our site. This means your loan must close and disburse within this number of days from the day your lock is confirmed by us. A rate lock extension of 7-14 days may be available should you experience a closing delay. Contact your Loan Originator if a closing delay is expected.
Immediately after you submit your application online, your interest rate is locked for 60 days. We will mail you information, a loan estimate and a rate lock confirmation within 3 days of receiving your application.
If you’ve ever purchased a home before, you may already be familiar with the benefits and terms of title insurance. But if this is your first home loan or you are refinancing, you may be wondering why you need another insurance policy.
The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and especially your mortgage lender, want to make sure the property is indeed yours: That no individual or government entity has any right, lien, claim, or encumbrance on your property.
The function of a title insurance company is to make sure your rights and interests to the property are clear, that transfer of title takes place efficiently and correctly, and that your interests as a homebuyer are fully protected.
Title insurance companies provide services to buyers, sellers, real estate developers, builders, mortgage lenders, and others who have an interest in real estate transfer. Title companies typically issue two types of title policies:
- Owner’s Policy: This policy covers you, the homebuyer.
- Lender’s Policy: This policy covers the lending institution over the life of the loan.
Both types of policies are issued at the time of closing for a one-time premium, if the loan is a purchase. If you are refinancing your home, you probably already have an owner’s policy that was issued when you purchased the property, so we’ll only require that a lender’s policy be issued.
Before issuing a policy, your attorney performs an in-depth search of the public records to determine if anyone other than you has an interest in the property.
After a thorough examination of the records, any title problems are usually found and can be cleared up prior to your purchase of the property. Once a title policy is issued, if any claim covered under your policy is ever filed against your property, the title company will pay the legal fees involved in the defense of your rights. They are also responsible to cover losses arising from a valid claim. This protection remains in effect as long as you or your heirs own the property.
The fact that title companies try to eliminate risks before they develop makes title insurance significantly different from other types of insurance. Most forms of insurance assume risks by providing financial protection through a pooling of risks for losses arising from an unforeseen future event, say a fire, accident or theft. On the other hand, the purpose of title insurance is to eliminate risks and prevent losses caused by defects in title that may have happened in the past. This risk elimination has benefits to both the homebuyer and the title company. It minimizes the chances that adverse claims might be raised, thereby reducing the number of claims that have to be defended or satisfied. This keeps costs down for the title company and the premiums low for the homebuyer. Buying a home is a big step emotionally and financially. With title insurance you are assured that any valid claim against your property will be borne by the title company, and that the odds of a claim being filed are slim.
First of all, let’s make sure that we mean the same thing when we discuss “mortgage insurance.” Mortgage insurance should not be confused with mortgage life insurance, which is designed to pay off a mortgage in the event of a borrower’s death. Mortgage insurance makes it possible for you to buy a home with less than a 20% down payment by protecting the lender against the additional risk associated with low down payment lending. Low down payment mortgages are becoming more and more popular, and by purchasing mortgage insurance, lenders are comfortable with down payments as low as 3 – 5% of the home’s value. It also provides you with the ability to buy a more expensive home than might be possible if a 20% down payment were required.
The mortgage insurance premium is based on loan to value ratio, type of loan, your credit score and amount of coverage required by the lender. The premium is included in your monthly payment.
It may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount – below 75% to 80% of the property value. Recent Federal Legislation requires automatic termination of mortgage insurance for many borrowers when their loan balance has been amortized down to 78% of the original property value. If you have any questions about when your mortgage insurance could be cancelled, please contact your Loan Originator.
Lastly, Torrington Savings Bank offers a program that waives PMI for eligible borrowers with at least a 10% down payment. Contact your loan originator to find out more today!
The maximum percentage of your home’s value depends on the purpose of your loan, how you use the property, and the loan type you choose, so the best way to determine what loan amount we can offer is to complete our online application!
A credit score is one of the pieces of information that we’ll use to evaluate your application. Financial institutions have been using credit scores to evaluate credit card and auto applications for many years, but only recently have mortgage lenders begun to use credit scoring to assist with their loan decisions.
Credit scores are based on information collected by credit bureaus and information reported each month by your creditors about the balances you owe and the timing of your payments. A credit score is a compilation of all this information converted into a number that helps a lender to determine the likelihood that you will repay the loan on schedule. The credit score is calculated by the credit bureau, not by the lender. Credit scores are calculated by comparing your credit history with millions of other consumers. They have proven to be a very effective way of determining credit worthiness.
Some of the things that affect your credit score include your payment history, your outstanding obligations, the length of time you have had outstanding credit, the types of credit you use, and the number of inquiries that have been made about your credit history in the recent past.
Credit scores used for mortgage loan decisions range from approximately 300 to 900. Generally, the higher your credit score, the lower the risk that your payments won’t be paid as agreed. Using credit scores to evaluate your credit history allows us to quickly and objectively evaluate your credit history when reviewing your loan application. However, there are many other factors when making a loan decision and we never evaluate an application without looking at the total financial picture of a customer.
An abundance of credit inquiries can sometimes affect your credit scores since it may indicate that your use of credit is increasing.
But don’t overreact! The data used to calculate your credit score doesn’t include any mortgage or auto loan credit inquiries that are made within the 30 days prior to the score being calculated. In addition, all mortgage inquiries made in any 14-day period are always considered one inquiry. Don’t limit your mortgage shopping for fear of the effect on your credit score.
There is no charge to you for the credit information we’ll access with your permission to evaluate your application online. You will only be charged for a credit report if you decide to complete the application process after you receive the loan estimate.
Yes, you can borrow funds to use as your down payment! However, any loans that you take out must be secured by an asset that you own. If you own something of value that you could borrow funds against such as a car or another home, it’s a perfectly acceptable source of funds. If you are planning on obtaining a loan, make sure to include the details of this loan in the Expenses section of the application.
We take full advantage of an automated underwriting system that allows us to request as little information as possible to verify the data you provided during your loan application. Gone are the days when it was necessary to verify every piece of data collected during the application. The automated underwriting system compares your financial situation with statistical data from millions of other homeowners and uses that comparison to determine the level of verification needed. In many cases, a single W-2 or pay stub can be used to verify your income or a single bank statement can be used to verify the assets needed to close your loan.
Generally, the income of self-employed borrowers is verified by obtaining copies of personal (and business, if applicable) federal tax returns for the most recent two-year period. However, based on your entire financial situation, we may not need full copies of your tax returns.
We’ll review and average the net income from self-employment that’s reported on your tax returns to determine the income that can be used to qualify. We won’t be able to consider any income that hasn’t been reported as such on your tax returns. Typically, we’ll need at least one, and sometimes a full two-year history of self-employment to verify that your self-employment income is stable.
In order for bonus, overtime, or commission income to be considered, you must have a history of receiving it and it must be likely to continue. We’ll usually need to obtain copies of W-2 statements for the previous two years and a recent pay stub to verify this type of income. If a major part of your income is commission earnings, we may need to obtain copies of recent tax returns to verify the amount of business-related expenses, if any. We’ll average the amounts you have received over the past two years to calculate the amount that can be considered as a regular part of your income.
If you haven’t been receiving bonus, overtime, or commission income for at least one year, it probably can’t be given full value when your loan is reviewed for approval.
We will ask for copies of your recent pension check stubs, or bank statement if your pension or retirement income is deposited directly in your bank account. Sometimes it will also be necessary to verify that this income will continue for at least three years since some pension or retirement plans do not provide income for life. This can usually be verified with a copy of your award letter. If you don’t have an award letter, we can contact the source of this income directly for verification.
If you’re receiving tax-free income, such as social security earnings in some cases, we’ll consider the fact that taxes will not be deducted from this income when reviewing your request.
Torrington Savings Bank doesn’t accept applications until you have an accepted offer to purchase. Contact a loan originator to discuss your qualifications for a mortgage. We’ll issue a pre-qualification letter. You can use the pre-qualification letter to assure real estate brokers and sellers that you are a qualified buyer. Having a pre-qualification for a mortgage may give more weight to any offer to purchase that you make.
When you find the perfect home, you’ll simply call your Loan Originators to complete your application.
Generally, only income that is reported on your tax return can be considered when applying for a mortgage. Unless, of course, the income is legally tax-free and isn’t required to be reported.
Some lenders may offer a stated income program, which means that you can be qualified for a loan based on the income you state rather than that which can be verified. Usually these programs require larger down payments and offer interest rates that are substantially higher than regular mortgage rates. We do not offer stated income programs at this time.
If you own rental properties, we’ll generally ask for the most recent year’s federal tax return to verify your rental income. We’ll review the Schedule E of the tax return to verify your rental income, after all expenses except depreciation. Since depreciation is only a paper loss, it won’t be counted against your rental income.
If you haven’t owned the rental property for a complete tax year, we’ll ask for a copy of any leases you’ve executed and we’ll estimate the expenses of ownership.
Generally, two years personal tax returns are required to verify the amount of your dividend and/or interest income so that an average of the amounts you receive can be calculated. In addition, we will need to verify your ownership of the assets that generate the income using copies of statements from your financial institution, brokerage statements, stock certificates or Promissory Notes.
Typically, income from dividends and/or interest must be expected to continue for at least three years to be considered for repayment.
Information about child support, alimony, or separate maintenance income does not need to be provided unless you wish to have it considered for repaying this mortgage loan.
Typically, income from a second job will be considered if a one-year history of secondary employment can be verified.
Having changed employers frequently is typically not a hindrance to obtaining a new mortgage loan. This is particularly true if you made employment changes without having periods of time in between without employment. We’ll also look at your income advancements as you have changed employment.
If you’re paid on a commission basis, a recent job change may be an issue since we’ll have a difficult time of predicting your earnings without a history with your new employer.
If you were in school before your current job, enter the name of the school you attended and the length of time you were in school in the “length of employment” fields. You can enter a position of “student” and income of “0.”
Unfortunately, if you are purchasing a home, we’ll have to use the lower of the appraised value or the sales price to determine your down payment requirement.
It’s still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value, but our investors don’t allow us to use this “instant equity” when making our loan decision.
Gifts are an acceptable source of down payment, if the gift giver is related to you or your co-borrower. We’ll ask you for the name, address, and phone number of the gift giver, as well as the donor’s relationship to you.
If your loan request is for more than 80% of the purchase price, we may need to verify that you have a certain percent of the purchase price from your own funds. Your underwriter will review this based upon your particular loan scenario.
Prior to closing, we’ll verify that the gift funds have been transferred to you by obtaining a copy of your bank receipt or deposit slip to verify that you have deposited the gift funds into your account.
If you’re selling your current home to purchase your new home, we’ll ask you to provide a copy of the settlement or closing statement you’ll receive at the closing to verify that your current mortgage has been paid in full and that you’ll have sufficient funds for our closing. Often the closing of your current home is scheduled for the same day as the closing of your new home. If that’s the case, we’ll just ask you to bring your settlement statement with you to your new mortgage closing.
Congratulations on your new job! If you will be working for the same employer, complete the application as such but enter the income you anticipate you’ll be receiving at your new location.
If your employment is with a new employer, complete the application as if this were your current employer and indicate that you have been there for one month. The information about the employment you’ll be leaving should be entered as a previous employer. We’ll sort out the details after you submit your loan for approval.
Generally, a co-signed debt is considered when determining your qualifications for a mortgage. If the co-signed debt doesn’t affect your ability to obtain a new mortgage we’ll leave it at that. However, if it does make a difference, we can ignore the monthly payment of the co-signed debt if you can provide verification that the other person responsible for the debt has made the required payments, by obtaining copies of their cancelled checks for the last six months.
Any student loan that will go into repayment within the next six months should be included in the application. If you are not sure exactly what the monthly payment will be at this time, enter an estimated amount.
If other student loans are reflected on your final credit report, which will not go into repayment in the next six months, we may need to ask you for verification that repayment will not be required during this time period.
Torrington Savings Bank will review your entire financial picture, including your income, assets and credit. We review every borrowers credit history thoroughly to determine your eligibility. If you’ve had a bankruptcy, foreclosure or short sale in the past, it may affect your ability to get a new mortgage. We will generally require that at least four years have passed since any of those occurrences. It is also required that you’ve re-established an acceptable credit history with new obligations that have been paid on time.
Please contact a Loan Originator to discuss your situation in detail or to ask questions.
An installment debt is a loan that you make payments on, such as an auto loan, a student loan or a debt consolidation loan. Do not include payments on other living expenses, such as insurance costs or medical bill payments. We’ll include any installment debts that have more than 10 months remaining and all lease payments regardless of how many are left when determining your qualifications for this mortgage.
In Connecticut an attorney must represent you and the bank in a purchase or refinance transaction, most times your attorney can also act in a dual capacity and represent the bank. We have a process in place to determine if this is possible, please consult with your Loan Originator for details. If dual representation is not possible the bank will select an attorney to represent our interests. Home equity loans and lines do not require an attorney for either party. A bank closing agent will conduct the closing with you at one of our banking locations. By all means, we recommend that you have an attorney at the closing if it would make you more comfortable. If your attorney has any questions about your new mortgage, please refer them to your Loan Originators. We’d be happy to provide any information necessary.
The most important documents you will sign at closing are the note and mortgage. Unless there are special circumstances, these documents are usually prepared one to two days before your closing. Other documents are prepared by the closing agent the day before or the day of your closing. If you would like copies of the completed documents to be sent to you after they are prepared, please contact your attorney or bank closing agent.
Most often, your attorney acts as our attorney and will represent us at the closing. Your attorney will contact you prior to closing to talk about your final documents and to provide a final breakdown of your closing fees. If you have any questions that the attorney can’t answer during the closing, ask them to contact your Loan Originators by phone and we’ll get you the answers you need – before the closing is over!
If you won’t be able to attend the loan closing, contact your Loan Originators to discuss other options.
The location of your closing depends on the type of loan. Mortgages to finance a purchase are closed at either the seller’s or buyer’s attorney’s office. Refinances would be closed in your attorney’s office and home equity loans and lines are closed at one of our banking locations by one of our bank closing agents.
We’ll deliver our loan documents and wire transfer your loan funds to the attorney prior to closing so that they’ll have plenty of time to prepare for your closing.
Automated monthly payments are available. After closing you will receive a Welcome Letter from Torrington Savings Bank. The letter will contain important information regarding your first payment and an opportunity to enroll in auto-pay. Simply return the enrollment form and we will take care of the rest. If you are obtaining a home equity loan and your interest rate reflects a discount for auto-pay; the bank closing agent will assist you with enrolling at your closing.
The changes made in Card Controls are effective immediately.
1. Click on Manage Profile Settings
2. You have the option to turn on the feature where your physical device is required to complete your transaction. You can also choose to only be alerted on transactions where your device is not present. To turn on Device Required go to the Locations section once you have completed setting up your profile. If you choose to turn on Device Required, you will need to click on “Set Current Device as Primary”.
Please Note: Any transaction made within an 8-mile radius and the device is present that transaction should be approved. Any transaction made outside of the 8-mile radius without the device present should be declined.
3. Setup your device to receive Push Notifications by: ➢ Clicking on the Add Destination ➢ Under the Notification Method select Push Notification ➢ Confirm your device’s name appears ➢ Click Add ➢ Click Submit
Please Note: You must be enrolled in push notifications. If you are already enrolled in push notifications you will not be required to enroll in push notifications; meaning you are already enrolled.
4. If you wish to receive email notification along with push notifications or just email notifications, you will need to: ➢ Click Add Destination ➢ Under the Notification Method select Email ➢ Input your email address ➢ Click Add ➢ Click Submit
Please contact us at 860-496-2152 or visit www.torringtonsavings.bank for more information.
Card Alerts allow you to receive push notification or e-mail alerts notifying you of recent debit card transactions. You can activate or deactivate card alerts, set card alerts for specific types of merchants and/or transaction types, and select a threshold transaction amount for receiving a card alert.
Card Controls allows you to take control of your Torrington Savings Bank Debit Cards, so you can define when, where, and how your card is used. You can instantly turn off your debit card by using Freeze/Unfreeze, restrict card usage to specific types of Merchants and/or Transaction Types, set Transaction Limits and restrict card use to specific geographical regions.
To enroll in text banking, please log in to the full online banking website, go to Service Center, and choose Text Banking. For a list of text banking commands and FAQs, please click the question mark (“?”) icon in the right hand corner of the “Register Phone Number.”
Yes! When logged into mobile banking, click on Banking Services, then “Manage Fingerprint/FaceID” and follow the prompts.
For the mobile app, use the “Forgot your password?” prompt on the log in screen. If you are still having difficulties, we are here to help. Just call 866-987-7603.
We are certain that you will enjoy the functionality of Torrington Savings Bank’s Mobile Banking product. While mobile banking is a safe, effective method of conducting your banking transactions, you should keep in mind the following precautions:
- Password-protect your mobile device and lock your device when it’s not in use. Keep your mobile device in a safe location.
- Never disclose personal information about your accounts via text message, i.e. account numbers, passwords, or any combination of information that can be used to steal your identity.
- If your mobile phone is lost or stolen, immediately contact your financial institution.
- Do not hack or modify your device, as this will leave it susceptible to infection from a virus or Trojan. When possible, install mobile security software on your device (if it’s available). Some mobile security solutions include: AhnLab Mobile Security, avast! PDA Edition, Kaspersky Mobile Security, and Norton Smartphone Security.
- Be aware that malware exists and fraudulent applications will continue to pop up.
- Don’t download applications onto your phone without checking them out first. Verify the legitimacy of an application with your financial institution before downloading it to your smartphone- verify that the app publisher or seller is your financial institution, or if possible, go through your financial institution’s website to download the application.
- Report any banking application that appears to be malicious to your financial institution right away.
- Monitor your financial records and accounts on a regular basis. This will enable you to spot any suspicious activity.
- If you have been a victim of identity theft, contact your financial institution immediately. You should also place a fraud alert on your credit report and continue to review your credit reports, close the accounts that you know (or believe) have been tampered with or opened fraudulently, and file a complaint with the Federal Trade Commission (FTC).
You should sign the back of your check and under the signature endorse with “Mobile Deposit Only at TSB”.
15 checks per month, $2,500 limit per day and $10,000 limit per month.
eNotices are electronic versions of some notifications that would otherwise be mailed to you. These include:
Overdraft Protection Transfer Notices
No more waiting for paper documents to arrive in your physical mailbox. By enrolling in eNotices, you will receive notification the day after you become overdrawn, allowing you to take action to prevent further overdraft items. Set up alerts for eNotices and you will receive an email whenever you have an eNotice to view.
Once you enroll in eStatements you will be able to view your account statements for up to 84 months.
To enroll your account(s) in eStatements, login to the full online banking site (not available on the mobile app) and click the “eDocuments” button at the top of the Accounts screen and follow the steps below.
Please note: If you are brought to the Statements screen immediately after selecting the “View eStatement” link, that appears next to the account number, this indicates that the account has already been enrolled in the eStatements..
1. Select “View eStatements” next to the account you wish to enroll.
2. Click the “Next” button on the following screen.
3. Review the Terms & Conditions and scroll to the bottom of the page to locate the PDF Acknowledgement Code.
4. Enter the PDF code in the box in the lower-left corner of the screen and click “Submit.”
5. Click the “Accept” button in the lower-right corner of your screen.
Your registration may still be pending or your registration has been delayed. Please try again later. If the problem persists, please contact Customer Service for assistance at Help Line: 866-987-7603.
If you have forgotten your password, the “Forgot Password” feature will allow you to Sign In and change your password.
To change your password, follow these steps:
- Step 1: Enter the requested personal authentication information. Click “Submit”.
- Step 2: Enter and confirm your new password. Click “Submit Password”.
Once your password has been changed, you will receive immediate access to your online banking. If you have questions regarding these steps, please contact our Help Line: 866-987-7603.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act is a bipartisan retirement bill that was included in a larger legislative package passed by the House of Representatives on December 17, 2019, and by the Senate on December 19, 2019. The bill was initially introduced in the House of Representatives and championed by Ways & Means Chairman Richard Neal and ranking member Kevin Brady. The bill includes reforms to DC Plans, DB plans, IRAs, and 529 plans.
Most provisions in the law became effective January 1, 2020.
For anyone who inherited an IRA from an original IRA owner who passed away prior to January 1, 2020, no changes to the current distribution schedule are required. However, for situations where the original IRA account owner passes away after December 31, 2019, fewer beneficiaries will be able to extend distributions from the inherited IRA over their lifetime. Many will instead need to withdraw all assets from the inherited IRA within 10 years following the death of the original account holder. Exceptions to the 10-year distribution requirement include assets left to a surviving spouse, a minor child, a disabled or chronically ill individual, and beneficiaries who are less than 10 years younger than the decedent.
The law increases the age at which an individual must begin taking required minimum distributions (RMDs) from 70½ to 72. The act states that this change applies beginning with IRA account owners who will attain 70½ on or after January 1, 2020. Congress recognizes Americans are increasingly working and living longer and updating RMD rules to reflect changes in life expectancy will allow Americans to continue their retirement savings for an extended period of time.