RETENTION OF INFORMATION: This disclosure
contains important information about our Home Equity Line of Credit. YOU
SHOULD READ IT CAREFULLY AND KEEP A COPY FOR YOUR RECORDS.
AVAILABILITY OF TERMS:
All of the terms described below are subject to change.
If these terms change (other than the annual percentage rate) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees you paid to us or anyone else in connection with your application.
SECURITY INTEREST: We will take a mortgage on your home. You could lose your home if you do not meet the obligations in your agreement with us.
POSSIBLE ACTIONS: We can terminate your line, require you to pay us the entire outstanding balance in one payment, and charge you certain fees if:
You engage in fraud or material misrepresentation in connection with the credit line.
You do not meet the repayment terms.
Your action or inaction adversely affects the collateral or our
rights in the collateral.
We can refuse to make additional extensions of credit or reduce your
credit limit if:
The value of the dwelling securing the line declines
significantly below its appraised or tax assessed value for
purposes of the line.
We reasonably believe you will not be able to meet the repayment
requirements due to material change in your financial
circumstances.
You are in default of a material obligation in the credit
agreement.
Government action prevents us from imposing the annual
percentage rate provided for or impairs our security interest such
that the value of the interest is less than 120 percent of the
credit line.
A regulatory agency has notified us that continued advances
would constitute an unsafe and unsound practice.
The maximum annual percentage rate is reached.
The initial agreement permits us to make certain changes to the terms
of the agreement at specified times or upon the occurrence of specified
events.
MINIMUM PAYMENT REQUIREMENTS: You can obtain advances of credit for 10 years (the “draw period”) as long as you are not in default. Your minimum monthly payment during the draw period will be due monthly and will equal the finance charges that accrued on the outstanding balance during the preceding month. Your minimum monthly payment during the draw period will not repay any of the principal (unless you are required to pay the $25 minimum amount as specified below).
After the draw period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance over 15 years (the “repayment period”). During the repayment period, payments will be due monthly. Your minimum monthly payment will equal 1/180th of the balance that was outstanding at the end of the draw period plus the finance charges that have accrued on the remaining balance during the preceding month.
If the payment determined for either the draw or repayment period is less than $25, the minimum payment will equal i) $25 or ii) the outstanding balance on your line plus accrued interest, whichever is less.
MINIMUM PAYMENT EXAMPLE: If you took a single $10,000.00 advance and the ANNUAL PERCENTAGE RATE was 5.49%, it would take 25 years to pay off the advance if you made only the minimum payments. During that period, you would make 120 payments ranging from $42.12. to $46.63 followed by 180 payments ranging from $55.82 to $102.19.
FEES AND CHARGES: There are no fees or charges to open and maintain a line of credit. You will have to obtain and pay for insurance on your home and you may have to obtain and pay for flood insurance.
MINIMUM DRAW AND BALANCE REQUIREMENTS: There is no
minimum credit advance. There is no minimum outstanding balance
required.
TAX DEDUCTIBILITY: You should consult a tax advisor regarding
the deductibility of interest and charges for the credit line.
VARIABLE RATE FEATURE: The line has a variable rate feature, and the ANNUAL PERCENTAGE RATE (corresponding to the periodic rate) and the interest payment can change as a result.
OTHER PRODUCTS: If you ask we will provide you with other information on our Home Equity Lines.
The ANNUAL PERCENTAGE RATE includes only interest and
not other costs.
The ANNUAL PERCENTAGE RATE will be fixed for the first three years, whether or not there is any balance outstanding on your Line of Credit. This initial rate is not based on the index and margin that will be used to make later rate adjustments. After three years, the rate will be based on the value of an index. The index is the Prime Rate published in the Wall Street Journal on the last business day of the month. (In case the Prime Rate is published as a range, we will use the lower rate.) To determine the ANNUAL PERCENTAGE RATE that will apply to your credit line, we add a margin to the value of the index. Your margin will be based on your creditworthiness and loan to value ratio.
ASK US FOR THE CURRENT INDEX VALUE AND ANNUAL PERCENTAGE
RATE. After you open a credit line, rate information
will be provided on periodic statements that we send to you.
RATE CHANGES: The initial ANNUAL PERCENTAGE RATE will be in effect for the first three years. After that the ANNUAL PERCENTAGE RATE can change monthly. The maximum ANNUAL PERCENTAGE RATE that can apply is 18%. Apart from this rate “cap”, there is no limit on the amount by which the rate can change during any one-year period.
MAXIMUM RATE AND PAYMENT EXAMPLES: If you had an outstanding balance of $10,000.00 during the draw period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $152.88. This annual percentage rate could be reached July 1, 2011.
If you had an outstanding balance of $10,000.00 at the beginning of the repayment period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $208.44. This annual percentage rate could be reached during the first month of the repayment period.
HISTORICAL EXAMPLE: The following table shows how the ANNUAL PERCENTAGE RATE and the minimum monthly payment for a single $10,000.00 credit advance would have changed based on changes in the index over the past 15 years. Index values in the table are the values in effect on the last business day in January of each year. While only one index value per year is shown, the index value would have varied during the year.
The table assumes that no additional credit advances were taken, that only the minimum payments were made each month, and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments will change in the future.
YEAR
INDEX (%)
*MARGIN (%)
ANNUAL
PERCENTAGE RATE (%)
MINIMUM
MONTHLY
PAYMENT ($)
Draw Period:
1994
6.00
-0.01
6.49**
55.12
1995
8.50
-0.01
6.49**
55.12
1996
8.50
-0.01
6.49**
55.12
1997
8.25
-0.01
8.24
69.98
1998
8.50
-0.01
8.49
72.11
1999
7.75
-0.01
7.74
65.74
2000
8.50
-0.01
8.49
72.11
2001
9.00
-0.01
8.99
76.35
2002
4.75
-0.01
4.74
40.26
2003
4.25
-0.01
4.24
36.01
Repayment Period:
2004
4.00
-0.01
3.99
89.45
2005
5.25
-0.01
5.24
97.10
2006
7.25
-0.01
7.24
108.85
2007
8.25
-0.01
8.24
111.55
2008
6.00
-0.01
5.99
92.87
*This is a margin we have used recently. Your margin will be based on your creditworthiness and the loan to value ratio. **This rate reflects an introductory fixed interest rate.
