Home Equity Application Disclosure
Lender: First National Bank, 223 Main Street, P.O. Box 940, Damariscotta ME 04543 (207) 563- 3 IMPORTANT TERMS OF OUR HOME EQUITY APPLICATION DISCLOSURE
This disclosure contains important information about our Home Equity Line of Credit (60 month draw period) (the “Plan”). 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 within 2 months from closing date. After that time, if any of 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 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 . Under the Plan, we have the following rights:
Termination and Acceleration. We can terminate the Plan and require you to pay us the entire outstanding balance in one payment, and charge you certain fees, if any of the following happens:
Suspension or Reduction. In addition to any other rights we may have, we can suspend additional extensions of credit or reduce your credit limit during any period in which any of the following are in effect:
Change in Terms. We may make changes to the terms of the Plan if you agree to the change in writing at that time, if the change will unequivocally benefit you throughout the remainder of the Plan, or if the change is insignificant (such as changes relating to our data processing systems).
Fees and Charges. In order to open and maintain an account, you must pay certain fees and charges. The following Lender Fees must be paid to us:
Description
Amount
When Charged
Loan Processing Fee
$150.00
At Closing
Third Party Fees. You must pay certain fees to third parties such as appraisers, credit reporting firms, and government agencies. These third party fees generally total between $100.00 and $700.00. We estimate the breakdown of these as follows:
Description
Amount
When Charged
Description
Amount
When Charged
Life of Loan Flood Determination Coverage:
$2.50
At Closing
Title Update:
$135.00
At Closing
Mortgage Discharge Recording Fee (future):
$22.00
At Closing
Appraisal Fee:
$730.00
At Closing
Initial Flood Zone Determination Certificate:
$12.10
At Closing
Initial Mortgage Recording Fee:
$53.00
At Closing
Credit Report Fee
$50.00
At Closing
Tax Tracking Fee Life of Loan
$85.00
At Closing
PROPERTY INSURANCE . You must carry insurance on the property that secures the Plan.
MINIMUM PAYMENT REQUIREMENTS . You can obtain advances of credit during the following period: The 5 Year period following the opening of your account (the “Draw Period”). After the Draw Period ends, the Repayment Period will begin. You will no longer be able to obtain credit advances. The length of the repayment period is as follows: 15 Year period following the end of the “Draw Period”. Your Regular Payment will equal the amount of your accrued FINANCE CHARGES. You will make 60 of these payments. Your payments will be due monthly. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment.
After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your balance at the start of this payment period plus all accrued FINANCE CHARGES as shown below (“Second Payment Stream”). Your payments will be due monthly.
Range of Balances
Number of Payments
Regular Payment Calculation
All Balances
180
0.556% of your balance at the start of the repayment period plus all accrued FINANCE CHARGES
Your “Minimum Payment” will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. In any event, if your Credit Line balance falls below $50.00, you agree to pay your balance in full.
MINIMUM PAYMENT EXAMPLE . If you made only the minimum payment and took no other credit advances, it would take 20 years to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 3.25%. During that period, you would make 60 monthly payments ranging from $24.93 to $27.60; then you would make 180 monthly payments ranging from $80.49 to $83.16.
RENEWAL OF LINE . After the Draw Period ends, you will no longer be able to obtain credit advances. If we determine that you continue to meet our current credit criteria and collateral valuation, at our discretion, we may extend the Draw Period for one or more additional Draw Periods. If the Draw Period is extended, the Repayment Period will immediately follow the new Draw Period.
TRANSACTION REQUIREMENTS . The following transaction limitations will apply to the use of your Credit Line:
Credit Line Check, Telephone Request, Request By Mail and In Person Request Limitations. There are no transaction limitations for the writing of Checks, requesting an advance by telephone, requesting an advance by mail or requesting an advance in person.
TAX DEDUCTIBILITY . You should consult a tax advisor regarding the deductibility of interest and charges for the Plan.
VARIABLE RATE FEATURE . The Plan has a variable rate feature. The ANNUAL PERCENTAGE RATE (corresponding to the periodic rate), and the minimum payment amount can change as a result The ANNUAL PERCENTAGE RATE does not include costs other than interest.
THE INDEX . The annual percentage rate is based on the value of an index (referred to in this disclosure as the “Index”). The Index is the highest Prime Rate published in the Wall Street Journal’s listing of “Money Rates”. We will use the most recent Index value available to us as of the first day of each month to determine any annual percentage rate adjustment. If the Index is no longer available, we will choose a new Index and margin. The new Index will have an historical movement substantially similar to the original Index, and the new Index and margin will result in an annual percentage rate that is substantially similar to the rate in effect at the time the original Index becomes unavailable.
ANNUAL PERCENTAGE RATE . To determine the Periodic Rate that will apply to your First Payment Stream, we add a margin to the value of the Index, then divide the value by the number of days in a year (daily). To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily). This result is the ANNUAL PERCENTAGE RATE for your First Payment Stream. To determine the Periodic Rate that will apply to your Second Payment Stream, we add a margin to the value of the Index, and then divide the value by the number of days in a year (daily). To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily). This result is the ANNUAL PERCENTAGE RATE for your Second Payment Stream. A change in the Index rate generally will result in a change in the ANNUAL PERCENTAGE RATE. The amount that your ANNUAL PERCENTAGE RATE may change also may be affected by the lifetime annual percentage rate limits, as discussed below. Please ask us for the current Index value, margin and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you.
FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS . Your ANNUAL PERCENTAGE RATE can change on the first day of each month. There is no limit on the amount by which the annual percentage rate can change during any one year period. However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 18.000% per annum at any time during the term of the Plan.
MAXIMUM RATE AND PAYMENT EXAMPLE : If you had an outstanding balance of $10,000.00 at the beginning of the Draw Period, the minimum payment during the First Payment Stream at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $152.88. The maximum ANNUAL PERCENTAGE RATE could be reached in the second month of the Draw Period. If you had an outstanding balance of $10,000.00 at the beginning of the Repayment Period, the minimum payment during the Second Payment Stream at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $208.48. The maximum ANNUAL PERCENTAGE RATE could be reached in the second month of the Repayment Period.
PREPAYMENT . You may prepay all or any amount owing under the Plan at any time without penalty.
HISTORICAL EXAMPLE . The example below shows how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10,000.00 credit advance would have changed based on changes in the Index from 2007 to 2021. The Index values are from the following reference period: as of October 1st of each year. While only one payment per year is shown, payments may have varied during each year. Different outstanding principal balances could result in different payment amounts. The table assumes that no additional credit advances were taken and that only the minimum payment was made. It does not necessarily indicate how the Index or your payment would change in the future.
INDEX TABLE
Year (as of October 1st)
Index (Percent)
Margin (1) Percent
Annual Percentage Rate (APR)
Monthly Payment (Dollars)
2007--------------------------------------------
7.750
0.000
7.750
64.58
2008--------------------------------------------
5.000
0.000
5.000
41.67
2009 ------------------------------------------
3.250
0.000
3.250
27.08
2010 -------------------------------------------
3.250
0.000
3.250
27.08
2011 -------------------------------------------
3.250
0.000
3.250
27.08
2012 (repayment begins in year six)
3.250
0.000
3.250
80.84
2013--------------------------------------------
3.250
0.000
3.250
79.03
2014--------------------------------------------
3.250
0.000
3.250
77.23
2015--------------------------------------------
3.250
0.000
3.250
75.42
2016--------------------------------------------
3.500
0.000
3.500
75.00
2017--------------------------------------------
4.250
0.000
4.250
76.81
2018--------------------------------------------
5.250
0.000
5.250
78.89
2019--------------------------------------------
5.000
0.000
5.000
75.00
2020 -------------------------------------------
3.250
0.00
3.250
66.39
2021 -------------------------------------------
3.250
0.00
3.250
64.69