Rev 9/1/06
IMPORTANT TERMS of our HOME EQUITY LINE OF CREDIT
1.25% Payment / 15 yr draw / Balloon (301B) / 6 mo FXD
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 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 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:
00You engage in fraud or material misrepresentation in connection with the line.
00You do not meet the repayment terms.
00Your 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:
00The value of your home has fallen below the amount of its appraised value at this time;
00Your financial circumstances have changed to such an extent that we believe you will be unable to repay the loan;
00You are in default of any material provision of this Agreement. Credit Union membership is a material provision of the
Agreement;
00We cannot impose the Annual Percentage Rate provided for by the terms of this Agreement due to government action to
the extent that the priority of our security interest is less than 120% of the credit line;
00A regulatory agency has notified us that continued advances would be an unsafe or unsound practice;
00The maximum rate allowed under the plan, if any, has been reached;
The initial agreement permits us to make certain changes to the terms of the agreement at a specified time or upon the occurrence
of specified events.
Minimum Payment Requirements: You can obtain advances of credit for 15 years (the "draw period"). During the draw period,
payments will be due monthly. Your minimum monthly payment will be determined by the following method: The amount of
your minimum monthly payment will be 1.25% of the outstanding principal balance. On the 15th of each month, an analysis is
completed. If advances have been made during the previous 30 days, your payment will be calculated based on the balance
including advances taken up to the 15th. In no event will your minimum payment be less than $50.00, unless the amount that you
owe is less, in which case that will be the minimum payment.
PAYING ONLY THE MINIMUM MONTHLY PAYMENT MAY NOT FULLY REPAY THE PRINCIPAL THAT IS
OUTSTANDING ON YOUR LOAN. AT THE END OF THE DRAW PERIOD YOU WILL BE REQUIRED TO PAY
THE ENTIRE REMAINING PRINCIPAL BALANCE IN A SINGLE BALLOON PAYMENT.
Minimum Payment Example: If you took an advance of $10,000 and took no other credit advance, and make only the minimum
payments (calculated at 8.500% an ANNUAL PERCENTAGE RATE recently in effect) you would have minimum monthly
payments of $125.00. During that time, you would make 119 monthly payments.
Fees & Charges: To open and maintain a line of credit:
00You may be required to pay certain fees to third parties to open a line. The estimated amount of these fees is $800. If
you ask, we will give you an itemization of the fees that you may be required to pay to third parties.
00Subordination Fee - $100.00 at the option of the Credit Union, upon the request for subordination.
00If you ask, we will provide you with an itemization of the fees you will have to pay to third parties. The mortgage
recording tax and title insurance fee shall be based on the maximum amount of the credit line available to you, whether
advanced or not.
Property Insurance: You must carry insurance on the property that is secured by this loan.
Rev 9/1/06
Early Closure Fee: If the HELOC is closed or refinanced within three years of origination an Early Closure Fee may be charged.
This Fee would be charged if the loan were obtained with a "no fee" offer. The Early Closure Fee would then be payable to NICU
as reimbursement for loan origination costs that were covered by NICU. Ask us for the current Early Closure Fee in effect. The
exact amount of the Early Closure Fee will be disclosed to you in your final loan documents.
Minimum Draw: No minimum advance amounts are required.
Tax Deductibility: You should consult a tax advisor regarding the deductibility of interest and charges for the line.
Fixed-Variable-Rate Feature: The Initial ANNUAL PERCENTAGE RATE may be discounted (at a fixed rate) and shall remain
in remain in effect for the first SIX months which means it is not based on the Index plus margin as used for later adjustments.
After the initial discounted rate period, the line has a variable-rate feature, and the Annual Percentage Rate (corresponding to the
periodic rate) or payment can change as a result. The APR excludes costs other than interest.
The Annual Percentage Rate is based on the value of an index. The index is the Major Bank Prime Rate as published in The Wall
Street Journal. To determine the Annual Percentage Rate that will apply to your credit line we add a margin as stated in your
credit agreement to the value of the index. Ask us for the current index value, discounted rate, margin and Annual Percentage
Rate. After you open a credit line, rate information will be provided on periodic statements that we send you.
The initial discounted start rate is an introductory rate offered only once per member .
Rate Changes: The Initial ANNUAL PERCENTAGE RATE shall remain in effect for the first SIX months of this loan.
Thereafter, it can change quarterly. The rate cannot increase or decrease by more than 4 percentage point(s) in any one year
period. The maximum ANNUAL PERCENTAGE RATE that can apply is 15.0% and the minimum ANNUAL PERCENTAGE
RATE is 4%.
Maximum Rate and Payment Example: If you had an outstanding balance of $10,000.00, the minimum monthly
Payment, at the maximum ANNUAL PERCENTAGE RATE of 15.0% under this program would be $125.00. This Annual
Percentage Rate could be reached upon the first interest rate Change Date.
Historical Example: The following table shows how the Annual Percentage Rate and the minimum payments for a single
$10,000.00 credit advance have changed based on changes in the index over the past 15 years. The index values are from July of
each 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 each year. The table does not necessarily indicate how the index or your payments will change
in the future.
Year Index Margin *1 APR *2
Min. Mo. Payment
1992
6.00%
.50%
6.50%
$125.00
1993
6.00%
.50%
6.50%
$125.00
1994
7.25%
.50%
7.75%
$125.00
1995
8.75%
.50%
9.25%
$125.00
1996
8.25%
.50%
8.75%
$125.00
1997
8.50%
.50%
9.00%
$125.00
1998
8.50%
.50%
9.00%
$125.00
1999
8.00%
.50%
8.50%
$125.00
2000
9.50%
.50%
10.00%
$125.00
2001
6.75%
.50%
7.25%
$125.00
2002
4.75%
.50%
5.25%
$125.00
2003
4.25%
.50%
4.75%
$125.00
2004
4.25%
.50%
4.75%
$125.00
2005
6.00%
.50%
6.50%
$125.00
2006
8.25%
.50%
8.50%
$125.00
*1. Recently used margin
*2. APR means ANNUAL PERCENTAGE RATE
North Island Credit Union
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