© CUNA Mutual Group, 1992, 1999, 2011 All Rights Reserved 01006595-EED00-065910-C-1-030619 (EED008-E)
REAL ESTATE LENDING
POWERED BY
CUNA MUTUAL
GROUP
HOME EQUITY
EARLY DISCLOSURE
IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT PLAN
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 (1)
you engage in fraud or material misrepresentation in connection with the plan;
(2) you do not meet the repayment terms of this plan, or (3) 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 10
years. This period is called the "draw period." At our option, we may renew or
extend the draw period. After the draw period ends the repayment period will
begin. The length of the repayment period will be based on the balance and
shall not exceed 180 months.
DRAW PERIOD - You will be required to make monthly payments during the
draw period. There are two payment options available during the draw period
herein referred to as Option “A” and Option “B”. At the time you establish a plan,
you will be required to select one of these options.
Option A: During the draw period, your payment will be 1.5% of the outstanding
balance each month or $75.00, whichever is greater. If the interest rate
increases, you will be required to make more payments until the end of the draw
period. Your payment will include any amounts past due and any amount by
which you have exceeded your credit limit, and all other charges.
Option B: During the draw period your monthly payment will equal the finance
charges (interest) that accrued on the outstanding balance during the preceding
month or $75.00, whichever is greater. If the interest rate increases, you will be
required to make a higher payment. Your payment will include any amounts
past due and any amount by which you have exceeded your credit limit, and all
other charges. This option is available if the combined loan-to-value does not
exceed 75.00%.
REPAYMENT PERIOD - You will be required to make monthly payments during
the repayment period. At the beginning of the repayment period, your payment
will be amortized to repay the outstanding balance at the current annual
percentage rate within the payoff period as stated in the table below. Your
payment will be rounded up to the nearest ten dollars.
Range of Balances Payoff Period
Up to - $24,999.99 84 Monthly Payments
$25,000.00 - $34,999.99 120 Monthly Payments
$35,000.00 - and above 180 Monthly Payments
During the repayment period, your payment may change if the annual
percentage rate increases or decreases. A change in the annual percentage rate
can cause the balance to be repaid more quickly or more slowly. We will check
your plan every year to determine the effect any annual percentage rate change
has had on your payment. If the annual percentage rate has changed, we will
adjust your payment to repay the balance within the time remaining to maturity.
Each time the annual percentage rate increases, we will check to see if the
payment is sufficient to pay the interest that is due. If not, we will increase your
payment by the amount necessary to repay the balance at the new annual
percentage rate within the time remaining to maturity. If, after our last review of
your plan prior to the maturity date, the annual percentage rate increases so
much that your payment is not sufficient to repay the balance before the maturity
date you will be required to make more payments of the same amount. Your
payment will never be less than the smaller of $75.00, or the full amount that you
owe. Your payment will include any amounts past due and any amount by which
you have exceeded your credit limit, and all other charges.
MINIMUM PAYMENT EXAMPLE – Option A: If you made only the minimum
monthly payment and took no other credit advances it would take 12 years 2
months to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE
RATE of 5.5%. During that period, you would make 120 payments of $75.00 to
$150.00, followed by 25 payments of $75.00 and one (1) final payment of
$71.93.
MINIMUM PAYMENT EXAMPLE – Option B: If you made only the minimum
monthly payment and took no other credit advances it would take 17 years to
pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of
5.5%. During that period, you would make 120 payments of $75.00, followed by
83 payments of $76.90 and one (1) final payment of $76.07.
FEES AND CHARGES: You may have to pay certain fees to third parties to
open the plan. These fees generally total between $240.00 and $741.00. If you
ask, we will provide you with an itemization of the fees you will have to pay third
parties. The credit union may pay these third party fees on your behalf. If we
do, and you close your line of credit within 36 months of the opening date, you
agree to reimburse the credit union for $240.00 of the bona fide third party fees
paid on your behalf.
PROPERTY INSURANCE: You must carry insurance on the property that
secures this plan. If the property is located in a Special Flood Hazard Area we
will require you to obtain flood insurance if it is available.
REFUNDABILITY OF FEES: If you decide not to enter into this plan within three
business days of receiving this disclosure and the home equity brochure, you are
entitled to a refund of any fee you may have already paid.
TRANSACTION REQUIREMENTS: The required minimum credit advance that
you will receive is $5,000.00 for the first advance. The minimum subsequent
