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: All 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 mistrepresentation in connection with the line of credit.
• 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 collateral securing the line of credit declines significantly below its appraised value for puposes of the line of credit.
• 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 inital agreement permits us to make changes to the terms of the Agreement at specified times or upon the occuence of 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 for 10 years.  This period is referred to as the "Draw Period".  During the draw period, payments will be due monthly.  Your minimum monthly payment will equal the finance charges (interest) accrued on the outstanding balance during the billing period.  The minimum payment during the draw period will not reduce the principal that is outstanding on your line. 

After the draw period ends, you will no longer be able to obtain credit advances and must repay the outstnading balance over 15 years referred to as the "Repayment Period".  During the repayment period, payments will be due monthly.  You minimum monthly payment will equal the balance outstanding at the end of the draw period plus finance charges that have accrued on the outstanding balance during the billing cycle.  

MINIMUM PAYMENT EXAMPLE: If you took a single $10,000 advance and the Annual Percentage Rate was 5.500%, it would take 25 years to pay off the advance if you only made the minimum payment.  Durign the draw period, you would make 120 monthly payments of $45.83, followed by 180 monthly payments of $81.71 during the repayment period.

RECOVERY OF COST FEES:  The following closing costs will be paid on your behalf up to the amount reflected:

• Appraisal / AVM-PICR - $200.00
• Credit Report Fee: $72.41
• Tax service Fee: $81.00
• Flood Zone Certification: $9.00
• Settlement or Closing Fee: $14.45
• Lender's Title Insurance: $165.00
• Notary Fee: $150.00
• Recording Fee: $337.00
• For a total of: $1,028.86

If this line of credit is paid off and closed within three years of the original date, you will be responsible for previously waived closing costs, to a maxium of $500.00.   You understand that these are the actual closings costs paid by the credi tunion on your behalf of the understinged.  Unless otherwise noted, all fees will be paid at closing.

MINIMUM DRAW REQUIREMENT: There is no minimum credit advance required.

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 hte annual percentage rate (corresponding to the periodic rate) and the minim monthly payment can changes as a result.

The annual percentage rate includes only interest and not 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 "Money Rates" table of the online or print edition of the Wall Street Journal.  To determine the annual percentage rate that will apply to your line, we add a margin to the value of the index.  If the annual percentage rate is not already rounded, we then round to the nearest 0.125%.   Ask us for the current index value, margin, and annual percentage rate.  After you open a line of credit, rate information willb e provided in the monthly billing statements that are sent to you. 

RATE CHANGES: The annual percentage rate can change monthly.  The rate cannot increase or decrease more than 2.00% at each change date or in any 1-year period.  The maximum Annual Percentage Rate that can apply is 18.00% or the maximum permitted by law, whichever is less.  However, under no circumstances will your Annual Percentage Rate go below 4.000% at any time during the term of the plan.

MAXIMUM RATE AND PAYMENT EXAMPLES: If you had an outstanding balance of $10,000 during the draw period, the monthly payment at the maximum Annual Percentage RateI of 18.00% would be $150.00.  If you had an outstanding balance of $10.000 during the repayment period, the minimum monthly payment at the maximum Annual Percentage Rate of 18.00% would be $1611.04.  This annual percentage rate could be reached in 9 years.

HISTORICAL EXAMPLE: The following table shows how the Annual Percentage Rate and the minimum monthly payments for a $10,000 outstanding balance would have changes based on changes in the index over the past 15 years.  The ideex values are from the first business day of January 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 indicated how the indext on your payments will chagne in the future.