HELOC is an acronym for Home Equity Line Of Credit. 
LTV is an acronym for Loan to Value.


HOME EQUITY EARLY DISCLOSURE

IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT PLAN

RETENTION OF INFORMATION: This disclosure contains important information about our Home Equity Line of Credit Plan. 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 that you pay to us or anyone else in connection with your application.
 

SECURITY INTEREST: We will take a security interest in 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 (i) you engage in fraud or material misrepresentation in connection with the plan; (ii) you do not meet the repayment terms of this plan; or (iii) 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 (1) any reasons mentioned above exist; (2) the value of the dwelling securing the line declines significantly below its appraised value for purposes of the line; (3) we reasonably believe that you will not be able to meet the repayment requirements due to a material change in your financial circumstances; (4) you are in default of a material obligation of the agreement; (5) government action prevents us from imposing the annual percentage rate provided for in the agreement; (6) the priority of our security interest is adversely affected by government action to the extent that the value of the security interest is less than 120 percent of the credit line; (7) a regulatory agency has notified us that continued advances would constitute an unsafe and unsound business practice, or (8) the maximum annual percentage rate is reached.
 

MINIMUM PAYMENT REQUIREMENTS: You can obtain credit advances for 5 years. This period is called the "draw period." After the Draw Period ends and unless your account is renewed pursuant to our terms in effect at that time, you will no longer be able to obtain credit advances and must repay the outstanding balance over the Repayment Period which ends 180 months from the date the plan is opened.  Your payment will include any amounts past due and any amount by which you have exceeded your credit limit, and all other charges. Your minimum monthly Payment is determined each time you make an advance under the plan, and is equal to the greater of (i) $100.00; or (ii) the amount sufficient to repay the outstanding balance in monthly principal and interest payments by the end of the Repayment Period (the “Maturity Date”). A minimum monthly payment is due each and every month in which a balance remains unpaid. In some cases (such as, if the interest rates increase), the minimum payments may not be sufficient to fully repay the outstanding balance. In such cases you will be required to pay the entire outstanding balance in a single payment (a balloon payment) at the Maturity Date.

 

MINIMUM PAYMENT EXAMPLE: If you made only the minimum monthly payment and took no other credit advances it would take 10 years 8 months to pay off a credit advance of $10,000 at an Annual Percentage Rate of 4.75%. During the Draw Period, you would make 60 payments of $100.00, and during the Repayment Period you would make 67 payments of $100.00, and one (1) final payment of $55.74.
 

FEES AND CHARGES: In order to open, use and maintain a line of credit plan, you must pay the following fees to us: N/A
 

PROPERTY INSURANCE: You must carry insurance on the property that secures this credit line. If the property is located in a Special Flood Hazard Area we will require you to obtain flood insurance if it is available. You may select the insurance company of your choice, provided the company and coverage meet our requirements.
 

TRANSACTION REQUIREMENTS: Your minimum Initial Advance is $ N/A. After you obtain the first advance, the minimum amount of each subsequent advance is $100.00.
 

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 the dwelling.
 

TAX DEDUCTIBILITY: You should consult a tax advisor regarding the deductibility of interest and charges for the plan.
 

VARIABLE RATE INFORMATION:  HELOC’s have a variable Annual Percentage Rate. The Annual Percentage Rate and the amount and/or number of minimum payments may change as a result. The Annual Percentage Rate includes only interest and no other costs.
 

The initial Annual Percentage Rate may be “discounted.” Any discount rate is not based on the index and margin used for later rate adjustments. The discounted initial rate will be in effect for the first N/A months your credit line is open.
 

The Annual Percentage Rate is based on the value of an index, and we may add a margin to the value of the Index. The index is the Prime Rate as published in the Money Rates column of the Wall Street Journal.
 

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 on the first day of each calendar quarter (a “Change Date”). Each change in the Annual Percentage Rate (and the related Daily Periodic Rate) will take effect on the Change Date without prior notice and will apply to both the new Advances and to your existing Account Balance. To determine the annual percentage rate that will apply to your account, we add a margin to the value of the Index. If the rate is not already rounded we then round up to the next 0.25%. The maximum Annual Percentage Rate that can apply is 18.0% (the “cap”) or the maximum permitted by law, whichever is less. The minimum Annual Percentage Rate that can apply is 3.0% (the “floor). Except for these “cap” and floor” rates, 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 at the beginning of the draw period, the minimum payment at the maximum Annual Percentage Rate of 18.0% would be $161.05. This annual percentage rate could be reached the first time your interest rate changes, unless you initial rate is equal to the maximum, in which case it would be reached immediately. If you had an outstanding balance of $10,000 at the beginning of the repayment period, the minimum payment at the maximum Annual Percentage Rate of 18.0% would be $180.17. This annual percentage rate could be reached at the beginning of the repayment period.
 

HISTORICAL EXAMPLE: The following table shows how the annual percentage rate and the minimum 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 month of January of each year. This table does not necessarily indicate how the index or your payments will change in the future.

 

Year

 

Index (%)

Margin (%)

*

Annual Percentage

Rate(%)

Minimum Periodic Payments

** ($)

2003

4.250

1.000

5.250

100.00

2004

4.000

1.000

5.000

100.00

2005

5.250

1.000

6.250

100.00

2006

7.250

1.000

8.250

100.00

2007

8.250

1.000

9.250

100.00

2008

7.250

1.000

8.250

100.00

2009

3.250

1.000

4.250

100.00

2010

3.250

1.000

4.250

100.00

2011

3.250

1.000

4.250

100.00

2012

3.250

1.000

4.250

100.00

2013

3.250

1.000

4.250

100.00

2014***

3.250

1.000

4.250

100.00

2015

3.250

1.000

4.250

-0-

2016

3.500

1.000

4.500

-0-

2017

3.750

1.000

4.750

-0-

 

(*)This is a margin we have used recently; your margin may be different. 

(**)This payment reflects the minimum payment amount of $100.00.

(***)This loan is paid off in this year.
 

What you should know about Home Equity Line of Credit