This disclosure contains important information about our Home Equity Line of Credit. You should read it carefully and keep a copy for your record.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 that 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: Under certain circumstances, we can (1) terminate your line of credit and require you to pay us the entire outstanding balance in one payment; (2) refuse to make additional extensions of credit; or (3) reduce your credit limit.
We can terminate your account and require you to pay us the entire outstanding balance in one payment if:
- You engage in fraud or material misrepresentation in connection with the plan;
- You do not meet the repayment terms; or
- 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:
- You engage in fraud or material misrepresentation in connections with the line of credit;
- You do not meet the repayment terms;
- Your action or inaction adversely affects the collateral or our rights in the collateral;
- The value of the dwelling securing the line of credit declines significantly below its appraised value for purposes of the line of credit;
- We reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial circumstances;
- You are in default of a material obligation of the 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 business practice; or
- The maximum annual percentage rate is reached.
Minimum Payment Requirements: You can obtain credit advances for 10 years (the draw period). During this period, payments will be due monthly. Your minimum monthly payment will equal 1.0% of the loan account balance of your last advance (principal plus interest or $100, whichever is greater). After the draw period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance on your account (the "repayment period"). The length of the repayment period is 15 years. During the repayment period, payments will be due monthly. Your minimum monthly payment will equal 1.0% of the loan balance at the start of the period (principal plus interest) or $100, whichever is greater. Balances of less than $100 must be paid in full. The minimum monthly payments may not be sufficient to repay the principal on your line of credit by the end of the draw and repayment periods. If they are not, you will then be required to pay the entire balance in a single payment.
Minimum Payment Example: If you made only the minimum monthly payment and took no other credit advances, it would take 18 years and 11 months to pay off a credit advance of $10,000 at the ANNUAL PERCENTAGE RATE of 10.25%. During that period you would make 226 monthly payments of $100 and a final payment of $69.85.
Fees and Charges: You may be required to pay certain fees to third parties such as credit reporting firms, government agencies, or appraisers. These fees generally total $50 to $600. If you ask, we will provide you with an itemization of these fees. YOU MUST CARRY INSURANCE ON THE PROPERTY SECURING THIS CREDIT LINE.
Refundability of Fees: If you decide not to enter into this plan within three days of receiving this disclosure and the Home Equity booklet, you are entitled to a refund of any fees you may have already paid.
Minimum Draw Requirements: The minimum credit advance that you can receive is $1,000.
Negative Amortization: Under some circumstances, your payments will not cover the finance charges that accrue, and "negative amortization" will occur. Negative amortization will increase the amount that you owe us and reduce your equity in your home.
Tax Deductibility: You should consult a tax advisor regarding the deductibility of interest and charges for the line of credit.
Variable Rate Features: This plan has a variable rate feature, and the annual percentage rate (corresponding to the periodic rate) and the minimum monthly payment may change as a result. The annual percentage rate includes only interest and no other costs. The annual percentage rate is based on the value of an index. The index is the highest base rate on corporate loans at large US money center commercial banks that The Wall Street Journal publishes as the Prime Rate. To determine the annual percentage rate that will apply to your account, we add a margin to the value of the index. Ask us for the current index value, margin rate limitations, and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you.
Rate Changes: The annual percentage rate can change quarterly. There is no limit on the amount by which the rate can change in any one year. The ANNUAL PERCENTAGE RATE cannot exceed the maximum rate allowed by law.
Maximum Rate and Payment Examples: If you had an outstanding balance of $10,000 at the beginning of the draw period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 24.00% would be $100. The maximum annual percentage rate during the draw period could be reached in the first month. If you had an outstanding balance of $10,000 at the beginning of the repayment period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 24.00% would be $100. The maximum annual percentage rate during the repayment period could be reached in the first month.
Historical Examples: The following table shows how the annual percentage rate and the minimum payments for a single $10,000 credit advance would have changed based on changes in the index over the last 15 years. The index values are from the first business day of January. While only one payment amount per year is shown, payments may have varied during each year. The table assumes that no additional credit advances were taken, that only the minimum payment was made, and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments would change in the future.
|Year||Index||Margin(1)||Annual Percentage Rate||Minimum Monthly Payment|
(1)This is a margin we have used recently; your margin may be different.
(2)This ANNUAL PERCENTAGE RATE reflects a discount that we have provided; your plan may be discounted by a different amount.
(3)This ANNUAL PERCENTAGE RATE reflects a floor of 5.500%.
This is not a commitment to make a loan. You hereby acknowledge receipt of this Home Equity Program Disclosure and a copy of the Home Equity Brochure on today's date.