Home Equity Line of Credit Important Terms

THIS DISCLOSURE CONTAINS INFORMATION ABOUT OUR HOME EQUITY LINES OF CREDIT. ALL TERMS ARE THE SAME EXCEPT FOR WHERE OTHERWISE INDICATED. YOU SHOULD READ IT CAREFULLY AND KEEP THIS COPY FOR YOURSELF.
Availability Of Terms
All 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/Deed of Trust on your home (“Security Property.”) You could lose your home if you do not meet certain obligations in your agreement with us.
Possible Actions
Termination
If you fail to meet the terms of repayment, or if you act or fail to act in a way that adversely affects our security interest or other rights in the Security Property, or if you have committed fraud or made a material misrepresentation in connection with the account, we may, subject to the governing law, terminate the plan, require payment in full of the entire outstanding balance in a single payment or cause the Security Property to be sold and the proceeds of such sale to be applied to your obligation to us. You agree to pay any reasonable costs of protecting, retaking, repairing or selling the Security Property.
Suspension
Your right to request additional advances may be suspended, or your maximum credit limit reduced, at our option, in the following instances: (1) you fail to make the scheduled payments due to us; (2) you fail to make timely payments to the holders of Mortgages/Deeds of Trust senior to ours; (3) you fail to pay real property taxes prior to delinquency; (4) you fail to maintain the required property insurance; (5) the value of the Security Property declines significantly below the appraised value upon which we relied in approving your application; (6) we reasonably believe that your ability to meet your payment obligations is impaired because of a material change in your financial circumstances; (7) governmental action precludes our imposing the interest rate provided herein or adversely affects the priority of our security interest such that the value of our interest is less than 120% of your maximum credit limit; (8) the maximum interest rate under the plan is reached; or (9) government regulatory authorities find that further advances under this plan constitute an unsafe and unsound practice. When the condition which caused the suspension of advances or reduction of your maximum credit limit no longer exists, the original terms of your agreement will be reinstated. You understand that if your right to request additional advances is suspended or your maximum credit limit is reduced, you still owe us whatever sums you have already borrowed, all other charges under your agreement and applicable Finance Charges.
Home Equity Plans
We offer two (2) Home Equity Lines of Credit, Plan 1 and Plan 2. The Plans differ based on: (i) the combined-loan-to-value (CLTV) ratio for your loan (the sum of the current outstanding debts secured by liens against the property plus the home equity line of credit maximum credit limit established for your loan, divided by the value of the property); and (ii) your creditworthiness. Those two factors determine the amount of the margin used to calculate the variable interest rate for your loan.
Plan 1 is for loans with a CLTV ratio equal to or less than 80.00% and uses a lower margin that generally results in a lower interest rate. For Plan 1 we have recently used a margin of 0.25 percentage points (0.25%).
Plan 2 is for loans with a CLTV ratio equal to less than 90.00% but greater than 80.00% and uses a higher margin that generally results in a higher interest rate. For Plan 2 we have recently used a margin of 1.25 percentage points (1.25%).
Not all applicants will qualify for all plans.
Minimum Payment Requirements
You can obtain credit advances for 120 months (the draw period). During the draw period, payments will be due on a monthly basis. During the draw period, Your Minimum Periodic Payment will be established at the close of each billing cycle at an amount equal to all accrued yet unpaid finance charges due, subject to the lesser of $50.00 or Your account balance.
After the draw period ends, you will no longer be able to obtain credit advances and you must pay your outstanding balance (the repayment period). The length of the repayment period will not exceed 180 months. During the repayment period, minimum payments will be due on a monthly basis and will be established on the 1st day of the repayment period, and any subsequent change in the interest rate, in the amount necessary to fully amortize the then unpaid balance by the Agreement Maturity Date.
Minimum Payment Example
Plan 1
If you made only the minimum payments and took no other credit advances, it would take 300 months to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 4.00%. During that period you would make 120 monthly payments of $50.00, followed by 179 monthly payments of $55.82, and a final payment of $56.82.
Plan 2
If you made only the minimum payments and took no other credit advances, it would take 300 months to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 4.50%. During that period you would make 120 monthly payments of $50.00, followed by 179 monthly payments of $62.04, and a final payment of $63.04.
Fees And Charges
To open a line of credit you may have to pay certain fees to third parties. The fees you may have to pay to third parties generally total from $350.00 – $800.00. If you ask, we will give you an itemization of the fees you may have to pay to third parties.
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Insurance
You must carry insurance on the property that secures this plan.
Tax Deductibility
You should consult a tax advisor regarding the deductibility of interest and charges for the line of credit.
Variable-Rate
These plans have a variable-rate feature and the annual percentage rate (corresponding to the periodic rate,) and the amount of your regularly scheduled payments can 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 Prime Rate in effect on the last day of each calendar month. To determine the annual percentage rate that will apply to your line of credit, we add a margin to the value of the index. Ask us for the current index value, margin, and annual percentage rate. After you open a line of credit, rate information will be provided in periodic statements that we send you.
Rate Changes
Your Annual Percentage Rate can change on the 1st day of each month of each year (a change date). Other than the minimum and maximum Annual Percentage Rates that can apply at any time to this account, there is no limit on the amount by which your interest rate can change in any one-year period.
The minimum ANNUAL PERCENTAGE RATE at any time is 4.00%.The maximum ANNUAL PERCENTAGE RATE at any time is 18.00%.
Maximum Rate And Payment Examples
If you had an outstanding balance of $10,000.00 during the draw period, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.00% would be $150.42. This Annual Percentage Rate could be reached during the 1st month of the draw period.
If you had an outstanding balance of $10,000.00 during the repayment period, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.00% would be $161.06. This Annual Percentage Rate could be reached during the 1st month of the repayment period.
Historical Example
The following table shows how the Annual Percentage Rate and the monthly payments for a single $10,000.00 credit advance would have changed based on changes in the index since 2007. The index is from The Wall Street Journal and is calculated on the first business day of July of each year. While only one payment amount per year is shown, payments may have varied during the year. The table assumes that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during the year. It does not necessarily indicate how the index or your payments will change in the future.
(1)This represents a margin which we have recently used, annual percentage rate, and minimum payment for our Plan 1 lines of credit.
(2)This represents a margin which we have recently used, annual percentage rate, and minimum payment for our Plan 2 lines of credit.
(3)This represents the 5.00% minimum annual percentage rate.
(4)This represents the $50.00 minimum payment.