Home Equity Loan & Line of Credit

This disclosure contains the important information about your Home Equity Line of Credit. You should read it carefully and keep a copy for your records.

Availability of Terms: The terms described below are subject to change at any time. 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 have paid to us or anyone else in connection with your application.

Security Interest: We will take a mortgage, deed of trust or other security interest on your home. You could lose your home if you do not meet the obligations of 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:

• 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 to the collateral.
• The prospect of payment, performance, or realization of our rights in the collateral is significantly impaired by your action or inaction (including, for example, if you engage in fraud or material misrepresentation in connection with the line at any time.)

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 security 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 practice
• The maximum annual percentage rate is reached.

The initial agreement permits us to make certain changes to the terms of the agreement at specified times or upon the occurrence of specified events.

Minimum Payment Requirements: You can obtain advances of credit for 118 months (the “draw period”). Payments will be due monthly during the draw period, and will be determined as described below:

Monthly Payments of Interest and Fees: The amount of finance charge accrued on outstanding advances each month, plus any fees and any amounts past due. This minimum payment will not reduce the principal that is outstanding on your credit line.

After the draw period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance over 240 months (the “repayment period”). Payments will be due monthly during the repayment period, and will be determined as described below:

Payments are calculated based on 1/240 of the balance outstanding at the end of the draw period plus any finance charges.

Minimum Payment Example: If you made only the minimum monthly payments and took no other credit advances, it would take 358 months to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 8.500%. During that period, you would make 118 monthly payments of $70.83 in the draw period followed by 240 monthly payments varying between $41.16 and $112.50.

Fees and Charges: You must pay the following fees to open and maintain your line of credit:

Closing Fees to Us. You must pay the following to us to open your line of credit:

Estimation of Third Party Closing Fees. You must pay certain fees at closing to third parties in order to open your line of credit. The third party fees you must pay at closing generally total between $0.00 and $3,000.00. If you ask, we will give you a good faith estimation of the itemized fees you will have to pay to third parties to open your line of credit.

Fees to Use Your Account. You must pay us the following fees to use your account:

Annual Fee: $50.00 for Owner Occupied Properties/$150.00 for Non-Owner Occupied Properties (due each year beginning on the first anniversary)

Wire Fee: $25.00 (due for each request you make to wire an Advance of funds against your HELOC Account)

Stop Payment Fee: $30.00 (due for each request to stop payment on a Draw or Draft Check)

Returned Credit Line Check Fee: $30.00 (due if a Check is drawn on your HELOC Account in an amount that causes the amount you owe to exceed your Credit Limit)

Returned Payment Fee: $20.00 (due for each payment check, draft, or similar instrument which is returned unpaid)

 Property Insurance. In addition to the fees and charges described above in this section, you must carry insurance (hazard and flood insurance, as applicable) on the property that secures the line of credit. You may obtain all required property insurance from and through anyone you choose that is reasonable and acceptable.

 Transaction Requirement: Non-Owner Occupied properties require an initial advance of $10,000.

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

Variable-Rate Feature: The line has a variable rate feature, and the annual percentage rate (corresponding to the periodic rate) and the minimum payment can change as a result of this feature.

The annual percentage rate includes only interest and not other costs.

The variable annual percentage rate will be based on the value of an index.  The index is the most recently published Prime Rate as of on the first business day of each calendar month in the “Money Rates” table in The Wall Street Journal. (if more than one index value is published we will use the highest published index value.)

To determine the annual percentage rate that will apply to your line, 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 credit line, rate information will be provided on periodic statements that we will send you.

Rate Changes: The annual percentage rate can change monthly. (If the initial rate is “discounted”, the annual percentage rate can change monthly once the initial “discount” period expires.) The maximum ANNUAL PERCENTAGE RATE that can apply is 18.000% and the Minimum rate is 1.000%. Apart from this 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 outstanding balance of $10,000 during the draw period, the minimum monthly payment during the draw period at the maximum ANNUAL PERCENTAGE RATE of 18.000% (this maximum rate is 9.50 percentage points above the most recent index plus margin shown in the Historical Example below) would be $150.00. This annual percentage rate could be reached during the 2^nd month following the date your line of credit is opened.

If you had an outstanding balance of $10,000 at the beginning of the repayment period, the minimum monthly payment during the repayment period at the maximum ANNUAL PERCENTAGE RATE of 18.000% (this maximum rate is 9.50 percentage points above the most recent index plus margin shown in the Historical Example below) would be $191.66. This annual percentage rate could be reached on the first day of the repayment period.

Historical Example: The following table shows how the annual percentage rate and the minimum monthly payments for a single $10,000 credit advance would have changed based on changes in the index over the past 15 years. The index values are from January 1st of each year. While only one payment amount per year is shown, payments could have varied during each year of the draw period and of the repayment period. The table assumes that no additional credit advances were taken, that only the minimum payments were made each month, and that the rate remained constant during each year. The table does not necessarily indicate how the index or your payments will change in the future.

* This is a margin we have used recently.
** This rate reflects the lifetime rate cap.
*** This rate reflects the lifetime rate floor.