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Important terms of our home equity line of credit loan program

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 are subject to change prior to the opening of your Home Equity account. 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 if:

  • You engage in fraud or material misrepresentation in connection with the 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 value for purposes of the line.
  • 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 in 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 90 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.

Minimum Payment Requirements

You can obtain credit advances for 7 years. This period is called the “draw period.” At our option, we may renew or extend the draw period. After the draw period ends the repayment period will begin. The length of the repayment period will depend on the balance at the time of the last advance you obtain before the draw period ends. You will be required to make monthly payments during both the draw and repayment periods. At the time you obtain a credit advance a payoff period will be used to calculate your payment. The payoff period will always be the shorter of the payoff period for your outstanding balance or the time remaining to the maturity date. Your payment will be set to repay the balance after the advance, at the current annual percentage rate, within the payoff period. Your payment will remain the same unless you obtain another credit advance. Your payment may also change if the annual percentage rate increases or decreases. Each time the annual percentage rate changes, we will adjust your payment to repay the balance within the original payoff period. Your payment will include any amounts past due and any amount by which you have exceeded your credit limit, and all other charges. Your payment will never be less than the smaller of $100.00 or the full amount that you owe.

Minimum Payment Example

If you made only the minimum payment and took no other credit advances; it would take 10 years and 2 months to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 5.250%. During that period, you would make 131monthly payments of $100.00. You would then make a final payment of $79.99.

Property Insurance

You must carry insurance on the property that secures this Plan. If the property is located in a Special Flood Hazard Area, you will be required to obtain flood insurance if it is available.

Refundability of Fees

If you decide not to enter into this plan within three business days of receiving this disclosure and the home equity brochure, you are entitled to a refund of any fee you may have already paid.

Transaction Requirements

The minimum amount of the first credit advance is $3,000.00. The minimum credit advance you can receive after the first advance is $500.00.

Tax Deductibility

You should consult a tax advisor regarding the deductibility of interest and charges for the line.

Variable-Rate Feature

This plan has a variable-rate feature, and the annual percentage rate (corresponding to the periodic rate) and minimum payment 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.

Description of Index

The index is the prime rate published in the Money Rates column of the Wall Street Journal. When a range of rates has been published, the highest rate will be used. We will use the most recent index value available to us as of the last day of the quarter before the date of any annual percentage rate adjustment. The margin you receive on your home equity line of credit will be determined by the loan to value in the property given as security.

Source of Index

Ask us for 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 send you.

Rate Changes

The annual percentage rate can change quarterly on the first day of January, April, July, and October. The maximum ANNUAL PERCENTAGE RATE that can apply is 18.000% or the maximum allowed by law, whichever is less. However under no circumstances will your ANNUAL PERCENTAGE RATE go below 6.000% during the term of the Plan.

Maximum Rate and Payment Examples

If you had an outstanding balance of $10,000 at the beginning of the draw period, the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $161.11. This annual percentage rate could be reached after the first quarter of the draw period.

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