IMPORTANT TERMS
OF OUR
HOME EQUITY LINE OF CREDIT

Property Address:                                                                                                                                                                                                                                                                                                               Lender:  Leighton State Bank

TBD Property Address & Street                                                                                                                                                                                                                                                                                                        900 Washington St
TBD City and State                                                                                                                                                                                                                                                                                                                                     Pella, Iowa 50219

 

This disclosure contains important information about our home equity line of credit. You should read it carefully and keep 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 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 mortgage on 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 and require you to pay us the entire outstanding balance in one payment 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 in the collateral.

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 the priority of our security interest such that the value of the interest is less than 120 percent of the credit line.
• The maximum annual percentage rate is reached.
• The initial Agreement permits us to make changes to the terms of the Agreement at specified times or upon the occurrence specified events.
• A regulatory agency has notified us that continued advances would constitute an unsafe and unsound practice.

Minimum Payment Requirements: You can obtain advances of credit (the "draw period") for 180 months. During the draw period, payments will be due monthly. Your minimum monthly payment will be: 1% of all unpaid advances, plus, all unpaid finance charges, and other charges, plus the advance portion of any unpaid minimum monthly payments from prior billing cycles. During the Draw Period your minimum monthly payment will not be less than $50. However, if the total amount outstanding on your HELOC Account is less than $50 your minimum monthly payment will be the total amount outstanding. Repayment Period will be after the completion of the Draw Period, where any unpaid balance and accrued interest will be due in a single balloon payment at maturity.

Minimum Payment Example: If you made only the minimum payments and took no other credit advances, it would take 180 MONTHS plus a balloon payment to pay off a credit advance of $10,000 at the ANNUAL PERCENTAGE RATE of 8.750%. During that draw period, you would make 179 payments varying between $172.92 and $50.

Fees and Charges: To open and maintain an account, you must pay the following fees:

 

Fee:                                       $ (due at application)

Points:                                $ % of credit line (due when account is opened)

Origination Fee:           $ (due when account is opened)

Loan Processing Fee: $ % of credit line (due when account is opened)

Other:                                 $ (due when account is opened)

Other:                                 $ (due when account is opened)

Annual Fee:                     $ (due each year beginning on the first anniversary of opening the account)

Termination Fee:         $ (due when account is terminated)

 

You may also be required to pay certain fees to third parties to open a line. These fees generally total between $242 and $706. If you ask, we will give you an itemization of the fees you will have to pay to third parties.

 

Minimum Draw Requirement:  There are no minimum credit advance requirements.

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 monthly 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 Wall Street Journal Prime Rate Index. The Prime Rate Index Information is available in the Federal Reserve Statistical Release H-15 (www.federalreserve.gov/releases/h15). To determine the annual percentage rate that will apply to your Home Equity Line of Credit, we add a margin to the value of the index.

Applicable margin will be contingent upon borrower qualifications.  Ask us for the current index value, margins, discount and annual percentage rates.  After you open a credit line, rate information will be provided on periodic statements that we send you. 

Rate Changes:  The ANNUAL PERCENTAGE RATE (APR) can change monthly. The minimum ANNUAL PERCENTAGE RATE that can apply is 3.500% and the maximum ANNUAL PERCENTAGE RATE that can apply is 21.000 %.  Apart from this floor rate and maximum "cap" rate 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 period equaled the 21.000% maximum and you had an outstanding balance of $10,000, the minimum monthly payment would be $275.00. This maximum ANNUAL PERCENTAGE RATE could be reached during the first month of the draw period following an initial hold of 1 day.

Historical Example: The following table shows how the ANNUAL PERCENTAGE RATE and the minimum monthly payments for a $10,000 outstanding balance would have changed based on changes in the index over the past 15 years. The index values are from December 31st of each year. While only one payment amount per year is shown, payments during the repayment period would have varied during each year.

 

The table assumes an outstanding balance of $10,000, that only the minimum payments were made, and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments will change in the future.

 

*Applicable margin based on borrower qualifications.  The Historical Example Table includes a margin that is the maximum margin for our Home Equity Line of Credit programs. 

By signing below, you hereby acknowledge receipt of this "Important Terms of Our Home Equity Line of Credit" Disclosure and a copy of the Home Equity Brochure, "When Your Home is on the Line," on the date indicated next to your signature.

Signatures

ACKNOWLEDGEMENT OF RECEIPT

I/we received a copy of this notice.

 Borrower    Date

 Co-Borrower  Date