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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: To obtain the terms described below, you must submit your application before October 31, 2004. 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 on your dwelling. You could lose your dwelling if you do not meet the obligations in your agreement with us.
Possible Actions: Under certain circumstances, we can (1) terminate your Line of Credit, require you to pay us the entire outstanding balance in one payment, and charge you certain fees, (2) refuse to make additional extensions of credit; (3) reduce your credit limit, or (4) implement certain changes as permitted by the plan.
If you ask, we will give you more specific information about when we can take these actions.
Minimum Payment Requirements: You can obtain advances of credit for 10 years (the "draw period"). After the draw period; you will no longer be able to obtain credit advances and must repay the outstanding balance (the "repayment period"). The length of the repayment period will depend on the balance outstanding at the beginning of it.
Level principal payments. Under this option, your payment will be due monthly and will equal 1/240 of the principal balance at the cycle date of the last borrowing plus unpaid accrued interest based on the current interest rate. The payment will be recalculated at each cycle date. You will also have the option to establish up to three (3) fixed rate loans at any one time. The amount due on these fixed rate loans will be in addition to the payment just described.
Or
You can obtain advances of credit for 5 Years (the "draw period"). After the draw period, you will no longer be able to obtain credit advances and must repay the outstanding balance (the "repayment period"). The length of the repayment period will be 10 years. The following payment option is available for the draw and repayment periods:
During the Draw Period of five (5) years, your payment will be due monthly and will equal interest only in an amount equal to the accrued interest based on the current interest rate. The payment will be recalculated at each cycle date. You will also have the option to establish up to three (3) fixed rate loans at any one time. The amount due on these fixed rate loans will be in addition to the payment just described.
During the Repayment Period, your payment will be due monthly and will equal 1/120th of the principal balance at the cycle date plus unpaid accrued interest based on the current interest rate, or $100.00, whichever is greater. The payment will be recalculated at each cycle date. The amount due on these fixed rate loans will be in addition to the payment just described.
Each month that you maintain a Lake City Bank demand deposit account and authorize payment by automatic draft, you will be sent a combined checking account and loan account statement showing the status of your loan account. Your payment will be deducted from your checking account balance in an amount equal to the above referenced payment option selected by you.
Each month that you do not have a Lake City Bank demand deposit account or do not authorize payment by automatic draft, you will be sent a monthly account statement. Your payment must be received by Lake City Bank within 10 days of your payment due date as shown on your monthly account statement or you will incur late payment penalties.
Minimum Payment Examples: If you took a single $10,000 advance, no additional advances were taken, and the ANNUAL PERCENTAGE RATE was 4.25%:
Under the level principal payment option, it would take 19 years and 10 months after the advance was made to pay off the advance if you made only the minimum payments. During that period, you would make 237 payments varying between $78.00 and $42.00, followed by a final payment of $5.64
Under the interest only payment option, you will not be required to repay any principal during the Draw Period. During the Draw Period you would make 60 payments varying between $36.10 and $32.60. During the Repayment Period, it would take 9 years and 7 months to pay off the advance if you made only the minimum payments. During that period, you would make 115 payments varying between $120.00 and $100.00, followed by a final payment of $93.35.
Fees and Charges: You will be required to pay an annual fee* of $50.00 which will be charged to your Line of Credit annually in February. If the interest paid in the previous year was $50.00 or greater, this fee will not be charged.
I understand that I will be charged a late payment fee of $16.00 for each payment which is received by you more than 10 days after its scheduled due date. The amount of this fee is subject to change as allowed by IC 24-4.5-1-106.
I agree to pay a fee equal to $15.00 each time my Line of Credit exceeds the maximum credit limit.
I agree to pay a fee equal to $20.00 for each check, negotiable order of withdrawal or share draft I issue in connection with this Contract that is returned because it has been dishonored.
You must carry insurance on the property that secures your Line of Credit.
Minimum Draw and Balance Requirements: The minimum credit advance you can receive is $250.00 when you use special checks provided by us or an overdraft occurs in your Lake City Bank checking account. The minimum for all other loan transactions is $500.00.
Tax Deductibility: You should consult a tax advisor regarding the deductibility of interest and charges for the Line of Credit.
Variable Rate Information: The Line has a variable rate feature, and the annual percentage rate (corresponding to the periodic rate), the minimum payment, and repayment term 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 published daily in the Wall Street Journal "Money Rates" table. To determine the annual percentage rate that will apply, we add a margin to the value of the index. For example, if the index is 4.00% and the margin is .25% then the ANNUAL PERCENTAGE RATE would be 4.25%.
If you maintain a Lake City Bank demand deposit account and authorize that account to be drafted for payment on your Line of Credit, your annual percentage rate will be reduced by .25% as long as you maintain the account and authorization.
The initial percentage rate is "discounted". if it is discounted, it is not based on the index and margin used for later adjustments. The initial rate will be in effect for a limited time.
Ask us for the current index value, margin, and annual percentage rate. After you open a Line of Credit, rate information will be provided on periodic statements that we will send you.
Rate Changes: The annual percentage rate can change daily. The maximum ANNUAL PERCENTAGE RATE that can apply is 21 %. Except for this 21% "cap," there is no limit on the amount by which the rate can change during any one-year period.
Maximum Rate and Payment Examples: If the ANNUAL PERCENTAGE RATE during the draw and repayment periods equaled the 21% maximum annual percentage rate and you had an outstanding balance of $10,000:
Under the level principal payment option, the minimum monthly payment would be $221.00.
Under the interest only Draw Period option, the minimum monthly payment would be $178.36, and during the Repayment Period, the minimum monthly payment would be $262.00.
This annual percentage rate could be reached during the first month of the draw and repayment periods.
Historical Example: The following tables show 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 indices over the past 15 years. For the draw and repayment periods, the index values for the Prime Rate are from the last business day in September of each year. While only one payment amount per year is shown, payments would have varied during 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. It does not necessarily indicate how the indices or your payments will change in the future. |
