Strategic Borrowing (2024)

1. Not all securities are marginable. Main types that are not marginable include mutual funds for the first 30 days after purchase; unlisted, low-priced, or illiquid equities; and low-rated corporate bonds.

2. The Pledged Asset Line is a demand line of credit provided by either Charles Schwab Bank, SSB, or Charles Schwab Premier Bank, SSB, (each, an Affiliated Bank and together, the Affiliated Banks). As a non-purpose line of credit, proceeds may not be used to purchase securities, pay down margin loans, or be deposited into any brokerage account.

Entering into a Pledged Asset Line and pledging securities as collateral involves a high degree of risk. You are pledging securities, the value of which is affected by events outside your control. Market fluctuations may cause the value of your pledged assets to decline. In addition, the Affiliated Banks, in its sole discretion, will determine at any time the eligible collateral criteria and the loan value of collateral. The Pledged Asset Line is uncommitted and the Affiliated Banks may demand full repayment at any time for any reason or no reason. In addition, if the loan value of collateral is insufficient to satisfy the minimum credit facility size or to support the outstanding loans, the Affiliated Banks may demand immediate payment of all or any portion of the outstanding obligations, or require additional cash or securities be pledged; otherwise the Affiliated Banks may immediately sell some or all of the pledged securities without further notice to you, which may result in tax consequences.

A Pledged Asset Line requires a brokerage account ("the Pledged Account") at Charles Schwab & Co., Inc. and sufficient eligible collateral to support a minimum credit facility size of $100,000. Brokerage products, including the Pledged Account, are offered by Charles Schwab & Co., Inc., Member SIPC and are not insured by the FDIC, are not deposits or obligations of Affiliated Banks, and are subject to investment risk, including the possible loss of principal invested. The Affiliated Banks are not acting or registered as securities broker-dealers or investment advisors.

Pledged Asset Lines to be held individually, jointly by natural persons, or by revocable trusts are offered by Charles Schwab Bank, SSB. Pledged Asset Lines to be held by incorporated organizations, non-incorporated organizations, or irrevocable trusts (collectively "entities") are offered by Charles Schwab Premier Bank, SSB.

Minimum initial advance of $70,000 required. All loans are subject to credit and collateral approval. Before you decide to apply for a Pledged Asset Line, make sure you understand the risks.

3. For Charles Schwab Bank & Charles Schwab Premier Bank Pledged Asset Line (PAL) Investor Advantage Pricing (IAP): PALs to natural persons and trusts are eligible for only one Investor Advantage Pricing discount per loan. PALs are eligible for an interest rate discount between 0.25% - 1.00% based on Borrower's Schwab brokerage and Schwab Bank combined qualifying assets totaling $250,000 or greater. Loans to organizational borrowers are not currently eligible for IAP discounts.

A. For PAL loans made to individuals, the "Borrower" is defined as any natural person(s) identified as Borrower(s) in the PAL loan application. Qualifying assets are based on the combined account balances as listed below:
a) Brokerage accounts in which the Borrower is an owner, trustee or custodian;
b) Traditional, Roth, and Rollover Individual Retirement Accounts (IRA)* - individually owned or inherited (excludes Educational & Custodial IRAs);
c) Bank deposit accounts in which the Borrower is an owner or trustee: checking & savings.
d) Non-retirement Corporate, LLC, Partnership and Sole Proprietorship accounts may be eligible depending on the Borrower's ownership and role (excludes business retirement accounts such as Simple IRA, SEP IRA & Pension Trust).

B. For PAL loans made to revocable trusts, the "Borrower" is defined as the Trust named in the PAL loan application. Qualifying assets are based on the combined account balances as listed below:
a) Brokerage accounts in which the Borrower is an owner;
b) Inherited IRAs (excludes Educational & Custodial IRAs);
c) Bank deposit accounts in which the Borrower is an owner: checking & savings;
d) The qualifying assets, as outlined in Section A above, of any natural person(s) named as BOTH "Trustee of Trust Borrower" AND "Grantor of Trust Borrower" as identified in the PAL loan application.

C. For PAL loans made to irrevocable trusts, the "Borrower" is defined as the Trust named in the PAL loan application. Qualifying assets are based on the combined account balances as listed below:
a) Brokerage accounts in which the Borrower is an owner;
b) Inherited IRAs (excludes Educational & Custodial IRAs);
c) Bank deposit accounts in which the Borrower is an owner: checking & savings.

*Clients of Independent Investment Advisors: Qualifying assets are based on non-retirement Schwab brokerage and Schwab Bank combined account balances. Retirement accounts, including all IRAs, are excluded from this offer.

Schwab Bank and Schwab Premier Bank make their best effort to identify all qualifying assets based on your client profile. If you have questions regarding your specific assets or account eligibility, please call your Regional Banking Manager for assistance.

Clients that utilize an eligible IRA account balance to qualify for certain discounts may qualify for one special IRA benefit package per loan. This includes an in-depth personal financial plan analysis to include a detailed review of your IRA by a Certified Financial Planner. This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab Bank recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.

Qualifying new assets must be deposited prior to the start of an application to be considered for discount purposes.

Charles Schwab Bank, SSB, Charles Schwab Premier Bank, SSB (each, an Affiliated Bank and together, the Affiliated Banks), and Schwab are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Pledged Asset Lines to be held individually, jointly by natural persons, or by revocable trusts are offered by Charles Schwab Bank, SSB. Pledged Asset Lines to be held by incorporated organizations, non-incorporated organizations, or irrevocable trusts (collectively "entities") are offered by Charles Schwab Premier Bank, SSB. Brokerage products, including the Pledged Account, are offered by Charles Schwab & Co., Inc., Member SIPC and are not insured by the FDIC, are not deposits or obligations of Affiliated Banks, and are subject to investment risk, including the possible loss of principal invested. The Affiliated Banks are not acting or registered as securities broker-dealers or investment advisors.

4. For home lending:

In order to participate, the borrower must agree that the lender, Rocket Mortgage, may share their information with Charles Schwab Bank and Charles Schwab Bank will share their information with the lender Rocket Mortgage. Nothing herein is or should be interpreted as an obligation to lend. Loans are subject to credit and collateral approval. Other conditions and restrictions may apply. This offer is subject to change or withdraw at any time and without notice. Interest rate discounts cannot be combined with any other offers or rate discounts. Hazard insurance may be required.

5. For Schwab Bank Investor Advantage Pricing (IAP): Loans are eligible for only one Investor Advantage Pricing discount per loan. Select mortgage loans are eligible for an interest rate discount of 0.250% - 1.000% based on qualifying assets of $250,000 or greater. Discount applies to ARMs, Jumbo 15-yr and Jumbo 30-yr fixed (excludes HELOCs, VA loans, and FHA loans). Discount for ARMs applies to initial fixed-rate period only. Qualifying assets are based on Schwab combined account balances, including:

a) Brokerage accounts in which the borrower(s) is an owner, trustee or custodian;
b) Traditional, Roth, and Rollover Individual Retirement accounts (IRA)* - individually owned or inherited (excludes Educational & Custodial IRAs);
c) Bank accounts in which the borrower(s) is an owner or trustee: checking & savings;
d) Non-Retirement Corporate, LLC, Partnership and Sole Proprietorship accounts may be eligible depending on the borrower's ownership and role (excludes business retirement accounts such as Simple IRA, SEP IRA & Pension Trust).

Schwab Bank makes its best effort to identify all qualifying assets based on your Social Security Number. If you have questions regarding your specific assets or account eligibility, please call your Regional Banking Manager for assistance.

Clients that utilize an eligible IRA account balance to qualify for certain discounts may qualify for a special IRA benefit package per loan. This includes a detailed review and consultation of your IRA with a Financial Consultant. This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab Bank recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.

Clients must notify Schwab and Rocket Mortgage of any new assets brought to firm during processing. Qualifying new assets should be deposited and verified 15 days prior to the anticipated closing date to avoid closing delays and remain eligible to receive the interest rate discount.

6. Home equity lines have a 10‐year draw period followed by a 20‐year repayment period. During the draw period, monthly payments of accrued interest are required. Payments will increase if rates increase. At the end of the draw period, your required monthly payments will increase because you will be paying both principal and interest.

Rates vary for second homes, vacation homes, or HELOCs opened as standalone accounts. The APR on your home equity line of credit is variable based upon the Wall Street Journal Prime Rate plus a margin. The maximum APR that can apply is 18% or the maximum amount permitted by state law, whichever is less. The minimum credit line amount is $50,000 or the minimum amount permitted by state law, whichever is less. The maximum credit line is $1,000,000. Additional terms and conditions apply. Please contact your Schwab Bank representative for assistance regarding eligible loan types.

HELOC Fees: The estimated range of fees you may pay is from $0 ‐ $29.00 for every $1,000 of your line amount and will vary based on the location of the property. The amounts provided are estimates and are not a substitute for initial disclosures of closing costs that you will receive once you apply for a home equity line of credit with Rocket Mortgage. Proof of proper and adequate insurance may be required prior to closing. You are responsible for paying any state, county, or local taxes imposed on a home mortgage transaction.

Charles Schwab Bank, SSB and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products offered by Charles Schwab & Co., Inc. (Member SIPC) are not insured by the FDIC, are not deposits or obligations of Charles Schwab Bank, SSB and are subject to investment risk, including the possible loss of principal invested. Charles Schwab & Co., Inc. does not solicit, offer, endorse, negotiate or originate any mortgage loan products and is neither a licensed mortgage broker nor a licensed mortgage lender. Home lending is offered and provided by Rocket Mortgage, LLC. Rocket Mortgage LLC., is not affiliated with The Charles Schwab Corporation, Charles Schwab & Co., Inc. or Charles Schwab Bank, SSB. Deposit and other lending products are offered by Charles Schwab Bank, SSB, Member FDIC and Equal Housing Lender.

Rocket Mortgage, LLC; NMLS #3030; www.nmlsconsumeraccess.org. Equal Housing Lender. Licensed in 50 states. AL License No. MC 20979, Control No. 100152352. AR, TX: 1050 Woodward Ave., Detroit, MI 48226-1906, (888) 474-0404; AZ: 1 N. Central Ave., Ste. 2000, Phoenix, AZ 85004, Mortgage Banker License #BK-0902939; CA: Licensed by Dept. of Business Oversight, under the CA Residential Mortgage Lending Act and Finance Lenders Law; CO: Regulated by the Division of Real Estate; GA: Residential Mortgage Licensee #11704; IL: Residential Mortgage Licensee #4127 – Dept. of Financial and Professional Regulation; KS: Licensed Mortgage Company MC.0025309; MA: Mortgage Lender License #ML 3030; ME: Supervised Lender License; MN: Not an offer for a rate lock agreement; MS: Licensed by the MS Dept. of Banking and Consumer Finance; NH: Licensed by the NH Banking Dept., #6743MB; NV: License #626; NJ: New Jersey – Rocket Mortgage, LLC, 1050 Woodward Ave., Detroit, MI 48226, (888) 474-0404, Licensed by the N.J. Department of Banking and Insurance.; NY: Licensed Mortgage Banker – NYS Banking Dept.; OH: MB 850076; OR: License #ML-1387; PA: Licensed by the Dept. of Banking – License #21430; RI: Licensed Lender; WA: Consumer Loan Company License CL-3030. Conditions may apply. Lending services provided by ©2000 – 2021 Rocket Mortgage LLC, a subsidiary of Rock Holdings Inc. "Rocket Mortgage" is a registered service mark of Intuit Inc., used under license.