IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT
IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT
THIS DISCLOSURE CONTAINS INFORMATION ABOUT OUR HOME EQUITY LINE OF CREDIT. 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 Deed of Trust/Mortgage 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 Deeds of Trust/Mortgages senior to ours; (3) you fail to pay real property taxes prior to delinquency; (4) you fail to maintain the required property insurance; (5) you fail to maintain the Security Property as your principal dwelling (for credit approved on an owner-occupied basis); (6) the value of the Security Property declines significantly below the appraised value upon which we relied in approving your application; (7) we reasonably believe that your ability to meet your payment obligations is impaired because of a material change in your financial circumstances; (8) 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 120.00% of your maximum credit limit; (9) the maximum interest rate under the plan is reached; or (10) 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 one (1) Home Equity Line of Credit Plan with two different pricing structures that are based on the loan-to-value ratio (LTV) and credit score. Not all applicants may qualify for all Plans.
Minimum Payment Requirements
During the draw period, payment will be due on a monthly basis. You can obtain credit advances for 120 months (the draw period). During the draw period, your minimum periodic payment will be an amount equal to the greater of: (a) 1.25% of your new unpaid account balance at the end of each billing cycle; or (b) the lesser of $100.00 or such 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 in no event exceed 120 months. During the repayment period, your minimum periodic payment will be an amount equal to the greater of: (a) 1.50% of your new unpaid account balance at the end of each billing cycle; or (b) the lesser of $100.00 or such account balance.
Paying only the minimum payment may not be sufficient to fully amortize your unpaid Account balance by the end of the Repayment Period in which case, you will be required to pay your entire remaining balance in a single balloon payment on the Agreement Maturity Date.
Negative Amortization
Under some circumstances, your payment will not cover the Finance Charges that accrue and Negative Amortization will occur during the draw period. Negative Amortization will increase the amount that you owe us and reduce your equity in your home.
Minimum Draw and Balance Requirements
The minimum credit advance you can receive is $50.00.
Minimum Payment Examples
Less Than 80% Loan-To-Value
If you made only the minimum payments and took no other credit advances, it would take 160 months to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 8.50%. During that period, you would make 120 monthly payments varying between $125.00 and $100.00 followed by 39 payments of $100.00 and a final payment of $57.39.
80% -90% Loan-To-Value
If you made only the minimum payments and took no other credit advances, it would take 187 months to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 10.00%. During that period, you would make 120 monthly payments varying between $125.00 and $100.00, followed by 66 monthly payments of $100.00 and a final payment of $82.20.
Fees and Charges
To open a line of credit, you may have to pay certain fees to third parties. These fees generally total from $500.00 to $1,500.00. If you ask, we will give you an itemization of the fees you will have to pay to third parties.
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 Feature
This plan has a Variable Rate feature. The Annual Percentage Rate (corresponding to the periodic rate) and the number of your regularly scheduled payments during the draw and repayment periods and/or the amount of your final 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. The index is the highest prime rate as published in The Wall Street Journal in effect on the first day of each calendar quarter of each year. If more than one rate is shown, we will use the higher rate. 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 quarterly. There is no limit on the amount by which the interest rate can change during any one year period other than the maximum and minimum Annual Percentage Rates that can apply at any time to this account.
The maximum ANNUAL PERCENTAGE RATE at any time is 16.00%. The minimum ANNUAL PERCENTAGE RATE will be an amount equal to the margin applicable to your account.
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 16.00% would be $125.00. This Annual Percentage Rate could be reached during the 3rd 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 16.00% would be $150.00. This Annual Percentage Rate could be reached during the 3rd 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 cash advance would have changed based on changes in the index since 2011. The index is from The Wall Street Journal and is calculated on the first business day of January 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.
Year | Index | Margin (1) | Margin (2) | Annual Percentage Rate (1) | Annual Percentage Rate (2) | Payment Period | Minimum Payment (1) | Minimum Payment (2) |
|---|---|---|---|---|---|---|---|---|
2011 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Draw | $125.00 | $125.00 |
2012 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Draw | $112.21 | $113.92 |
2013 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Draw | $100.72 | $103.81 |
2014 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Draw | $100.00 (3) | $100.00 (3) |
2015 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Draw | $100.00 (3) | $100.00 (3) |
2016 | 3.50 | 1.00 | 2.50 | 4.50% | 6.00% | Draw | $100.00 (3) | $100.00 (3) |
2017 | 3.75 | 1.00 | 2.50 | 4.75% | 6.25% | Draw | $100.00 (3) | $100.00 (3) |
2018 | 4.50 | 1.00 | 2.50 | 5.50% | 7.00% | Draw | $100.00 (3) | $100.00 (3) |
2019 | 5.50 | 1.00 | 2.50 | 6.50% | 8.00% | Draw | $100.00 (3) | $100.00 (3) |
2020 | 4.75 | 1.00 | 2.50 | 5.75% | 7.25% | Draw | $100.00 (3) | $100.00 (3) |
2021 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Repayment | $0.00 | $100.00 (3) |
2022 | 3.25 | 1.00 | 2.50 | 4.25% | 5.75% | Repayment | $0.00 | $0.00 |
2023 | 7.50 | 1.00 | 2.50 | 8.50% | 10.00% | Repayment | $0.00 | $0.00 |
2024 | 8.50 | 1.00 | 2.50 | 9.50% | 11.00% | Repayment | $0.00 | $0.00 |
2025 | 7.50 | 1.00 | 2.50 | 8.50% | 10.00% | Repayment | $0.00 | $0.00 |
(1) This represents the Margin (which we have recently used), Annual Percentage Rate and Minimum Payments for our Lines of Credit with a loan-to-value less than 80.00%.
(2) This represents the Margin (which we have recently used), Annual Percentage Rate and Minimum Payments for our Lines of Credit with a loan-to-value of 80.00% - 90.00%.
(3) This represents the $100.00 minimum payment.
Warning: You Are Leaving This Site.
You are leaving the Topside Federal Credit Union website.
You are being directed to a third-party website.
This link is provided for your convenience. Please note that this third-party website is not controlled by Topside Federal Credit Union or subject to our privacy policy.
Thank you for visiting our site. We hope your visit was informative and enjoyable.
You are about to follow a link to [Link]. To proceed, click 'Continue' below. To remain on this site, click 'Cancel' below.