Home Equity Line Rules & Regulations
This Disclosure contains important information about our
Home Equity Line of Credit. You should read it carefully and keep a copy
for your records. If you want a hard copy of
this disclosure sent to you please contact us.
Availability of Terms
All 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
Under certain
circumstances we can: (1) terminate your line and require you to pay us the
entire outstanding balance in one payment (2) refuse to make additional
extensions of credit; (3) reduce your credit
limit; and (4) make specific
changes that are set forth in your agreement with us. If you ask, we will
give you more specific information concerning when we take these actions.
Minimum Payment Requirements
You can obtain advances of credit for one, three
or five years ("draw period"). Thereafter, the draw period shall be
automatically extended for a period equal to the original term unless from year to year unless we notify you in writing
to the contrary at least 30 days prior to its maturity date and 30 days
prior to each maturity date thereafter. During the draw period,
payments will be due monthly. Your minimum monthly payment is the greater
of $50 or 1.5 percent of the principal balance outstanding as of the
closing date of the monthly statement. If the Annual Percentage Rate
should reach 18.00 percent, the minimum monthly payment would pay the
interest only and would not decrease the principal balance outstanding.
Under some circumstances, your payments will not cover the finance changes
that accrue and "negative amortization" will occur. Negative
amortization will increase the amount that you owe us an reduce your
equity in your home. If we have notified you in writing that the draw
period has been discontinued, you will no longer be able to obtain credit
advances, and you must repay the entire outstanding balance of the account
in a single "balloon" payment at that time.
Minimum Monthly
Payment Example
If you made only the minimum monthly payments, it would
take three years to pay off a $10,000.00 advance at an Annual Percentage
Rate of 8.25 percent. During that period, you would make 35 payments
varying between $150.00 and $113.66, followed by one final payment of
$7,515.10.
Fees and Charges
To open and maintain a line of credit, you
must pay the following fees to us. An annual account membership fee of
$35.00. You must also pay certain fees to third parties. These fees
generally total between $200 to $500. If you ask, we will give you an
itemization of the fees you will have to pay to third parties. You must
carry insurance on the property that secures the home equity credit
agreement.
Tax Deductibility
You should consult a tax advisor regarding
the deductibility of interest and charges for the line.
Other Products
If
you ask, we will provide you with information on our other available Home
Equity Lines.
Variable Rate Information
The line has a variable-rate
feature, and the Annual Percentage Rate (corresponding to the periodic
rate) or term may change as a result. The Annual Percentage Rate includes
only interest and not other costs. Finance charges accrue on the date of
each loan and there is no fee period. The Annual Percentage Rate is based
on the value of an index. The index is the highest money center bank prime
rate published in the "money rates" table of the Wall Street
Journal. To determine the Annual Percentage Rate that will apply to your
line, we add a margin to the value of the index. Ask us the current index
value, margin, and Annual Percentage Rate. After you open a credit line,
rate information will be provided on periodic statements that we will send
you.
Rate Changes
The Annual Percentage Rate can change monthly. The
maximum Annual Percentage Rate that can apply, during the term of your
line of credit is 18.00 percent. Except for the 18.00 percent rate cap,
there is no limit on the amount by which the rate can change during any
one-year period.
Maximum Rate and Payment Example
If you had an initial
outstanding balance of $10,000, the minimum monthly payment at the maximum
Annual Percentage Rate of 18.00 percent would be $150.00. This Annual
Percentage Rate could be reached during this first month of the draw
period.
Historical Example
The following table shows how the Annual Percentage Rate
and the minimum monthly payments for a starting balance of $10,000 would
have changed based on changes in the index over the past 15 years. The
index values are from the first business day in January of each year.
While only one payment amount per year is shown, payments would have
varied during each year. This table does not necessarily indicate how the
index or your payments will change in the future.
Historical Example
