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Home > Loans & Credit Cards > Home Loans > 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. The length of the repayment period will be 15 years. You will be required to make payments during the draw and repayment periods. Your payment will be $1.50/$100 or portion of $100.00 if you elect credit insurance; $1.30/$100.00 if you do not elect credit insurance, of the outstanding balance at the time you obtain an advance or $100.00, whichever Is greater. If your outstanding balance is in excess of an even $100.00, the amount will be rounded to the next even $100.00 for payment calculation. Your payment will include any amounts past due and any amount by which you have exceeded your credit limit, and all other charges. We will recalculate your payment each time you obtain an advance.

If the interest rate increases. you will be required to make more payments of the same amount until the end of the repayment period. If the ANNUAL PERCENTAGE RATE exceeds 13.5% for longer than one full monthly rate change cycle, the factor will increase to $1.95/$100 (with credit insurance election), $1.70/$100 (without credit insurance). If the ANNUAL PERCENTAGE RATE decreases to less than 13.5% the factor will revert to the original figure. These events could change your payment at times other than after subsequent advances. If this happens we will provide notice to you.

[The minimum payment may not repay the outstanding balance by the end of the repayment period. You will then be required to make a single balloon payment at the maturity date. Unless otherwise required by applicable law, we are under no obligation to refinance the balloon payment at that time. You may be required to make payments out of other assets you own or find a lender, which may be us, willing to lend you the money. If you refinance the balloon with us, you may have to pay some or all of the closing costs.]

MINIMUM PAYMENT EXAMPLE: If you made only the minimum monthly payment and took no other credit advances it would take 7 years 9 months to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 4.25%. During that period, you would make 89 payments of $130.00 and one (1) final payment of $124.77.

FEES AND CHARGES: You must pay certain fees to third parties to open the plan. These fees generally total between $0 and $600. If you ask, we will provide you with an itemization of the fees you will have to pay third parties.

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.

TRANSACTION REQUIREMENTS: The minimum credit advance that you can receive is $500 for the first advance and $100 for each subsequent advance, if requested by direct contact with the Credit Union office. There is no subsequent minimum amount when advance requests are made by remote means.

TAX DEDUCTIBILITY: You should consult a tax advisor regarding the deductibility of interest and charges for the plan.

ADDITIONAL HOME EQUITY PLANS: Please ask us about our other available home equity line of credit plans.

VARIABLE RATE FEATURE: This plan has a variable rate feature and the annual percentage rate (corresponding to the periodic rate) and the minimum payment may 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 Prime Rate published in the Money Rates column of the Wall Street Journal. When a range of rates has been published the highest rate will be used. We will use the most recent index value available to us as of 1 day before the date of any annual percentage rate adjustment.

To determine the annual percentage rate that will apply to your account, we add a margin to the value of the Index.  Ask us for the current index value, margin, and annual percentage rate. After you open a plan, rate information will be provided on periodic statements that we send you.

RATE CHANGES: The annual percentage rate can change on the last day of each month. There is no limit on the amount by which the annual percentage rate can change during any one year period. The maximum ANNUAL PERCENTAGE RATE that can apply is 18% or the maximum permitted by law, whichever is less. However, under no circumstances will your ANNUAL PERCENTAGE RATE go below 4% at anytime during the term of the plan.

MAXIMUM RATE AND PAYMENT EXAMPLES: If you had an outstanding balance of $10,000, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $170. This annual percentage rate could be reached at the time of the 1st payment.

HISTORICAL EXAMPLE: The following table shows how the annual percentage rate and the minimum payments for a single $10,000 credit advance would have changed based on changes in the index over the past 15 years.

The index values are from the last business day of July of each year. While only one payment per year is shown, payments may 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 index or your payments will change in the future.

(as of the last business day of July)
2005 6.250 0.000 6.250 $130.00
2006 8.250 0.000 8.250 $130.00
2007 8.250 0.000 8.250 $130.00
2008 5.000 0.000 5.000 $130.00
2009 3.250 0.000 4.000(2) $130.00
2010 3.250 0.000 4.000(2) $130.00
2011 3.250 0.000 4.000(2) $130.00
2012 3.250 0.000 4.000(2) $130.00
2013 3.250 0.000 4.000(2) $130.00
2014 3.250 0.000 4.000(2) $130.00
2015 3.250 0.000 4.000(2) $130.00
2016 3.500 0.000 4.000(2) $130.00
2017 4.250 0.000 4.250 $130.00
2018 4.500 0.000 4.500 $130.00
2019 5.500 0.000 5.500 $130.00

(1)This is a margin we have used recently; your margin may be different.

(2)This ANNUAL PERCENTAGE RATE reflects a 4.000% floor.

© CUNA Mutual Group, 1992, 1999, 2011 All Rights Reserved. C301420ED (EED006-E)

What you should know about home equity lines of credit

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