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Important Terms of Our Home Equity Line of Credit

This disclosure contains important information about our Home Equity Line of Credit. You should read it carefully and keep a copy for your records.

All of the terms described below are subject to change.

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 you paid to us or anyone else in connection with your application.

Minimum Line Amount: $10,000.00

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, require you to pay us the entire outstanding balance in one payment and charge certain fees if: (1) you engage in fraud or material misrepresentation in connection with the line. (2) You do not meet the repayment terms. (3) Your action or inaction adversely affects the collateral or rights to the collateral.

We can refuse to make additional extensions of credit or reduce your credit limit if: (1) the value of the dwelling securing the line declines significantly below its appraised value for purposes of the line. (2) We reasonably believe that you will be unable to fulfill the repayment obligations under this agreement because of a material change in your financial circumstances. (3) You are in default of any material obligation under your loan agreement (4) Government action prevents us from imposing the annual percentage rate provided for or impairs our security interest such that the value of the interest is less than 120 percent of the credit line. (5) A regulatory agency has notified us that continued advances would constitute an unsafe and unsound practice. (6) The maximum annual percentage rate is reached.

The initial Agreement permits us to make certain changes to the terms of the Agreement at specific times or upon the occurrence of specified events.

Minimum Payment Requirements: You can obtain advances of credit for 10 years (the "Draw Period"). During the Draw Period, your payments will be due monthly. Your minimum monthly payment will equal the greater of $50.00, or the sum of the finance charges that have accrued on the outstanding balance, plus any late charges if applicable.

Minimum monthly payments, in those months when your accrued interest is equal to or greater than $50.00, will not reduce the principal balance outstanding on your loan. The Bank may, in its sole discretion, extend the Draw Period for an additional 10 years.

After the Draw Period ends, you will no longer be able to obtain credit advances and must repay the outstanding balance over 120 months ("the Repayment Period"). During the repayment period, payments will be due monthly. Your minimum payment will equal the amount of the balance that was outstanding at the end of the Draw Period plus the finance charges that have accrued on the remaining balance, and the greater of the following: 1/120th (.8333%) of the balance that was outstanding or $50.00.

Late Charges: You must pay us a late charge if you do not pay a payment in full within 15 days of its due date. The amount of the late charge will be the lesser of $10.00 or 10% of the unpaid portion of your overdue payment.

Minimum Payment Example: If you made only the minimum monthly payments and took no other credit advances; it would take 20 years to pay off an initial credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 4.25%. During that period you would make 120 monthly payments of $50.00 followed by 120 payments varying between $119.43 and $86.94.

Credit Towards Closing Costs: Lines of Credit of at least $50,000.00, or $25,000.00 if closing with an Institution for Savings residential mortgage loan, may be eligible for a credit of up to $400.00, to be applied towards closing costs. To be eligible, the property securing the line must be an owner occupied 1-4 family primary residence and not on the market for sale, or to be placed on the marked for sale within the next twelve months.

Fees and Charges: (When Closing Costs Apply): To open and maintain a line of credit, you must pay certain fees to third parties. These fees generally total between $0.00 and $1,600.00; if you ask, we will give you an itemization of fees you will have to pay to third parties. Fees may be higher for lines in excess of $250,000.00 and/or loans secured by a first mortgage lien. These fees generally total between $400.00 and $2,500.00.

The Bank reserves the right to charge closing costs for lines less than $50,000.00 or in excess of $250,000.00, for lines granted in the name of any entity rather than individuals, loans secured by second homes, loans secured by real estate outside of Essex County MA, loans for short term or “bridge” financing and for loans secured by a first mortgage lien. [Note: See above, “Fees and Charges,” for range of cost.]

Early Termination Fee:
If your account is paid off and closed within first three years from the date it is originated, and a mortgage discharge is requested, you may be required to pay us a fee, not to exceed $500.00.

Hazard Insurance: You must carry sufficient insurance, including flood insurance if applicable, on the property that secures this line.
 
Minimum Draw Requirements: The minimum credit advance that you can receive is $250.00.

Tax Deductibility: You should consult a tax advisor regarding the tax deductibility of interest and charges for the line.

Variable Rate Information: The line has a variable-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 value of an index. The index is the Prime Rate as Published by the Wall Street Journal in its Money Rates section on the last business day of each calendar month. If the Journal publishes more than one Prime Rate, we will use the higher rate.

To determine the annual percentage rate, we may add or subtract a margin to the value of the index. 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 will send you.

Rate Changes: The annual percentage rate can change monthly. The maximum ANNUAL PERCENTAGE RATE that can apply is 11.00%. The minimum interest rate that can apply is 3.250%. Except for this maximum rate of 11.00% and minimum rate of 3.250% there is no limit on the amount by which the rate can change during any one-year period.

Information about your rate will be provided on or with each periodic statement.

Introductory Rate Period: From time to time we may offer an Introductory Rate Period. During the Introductory Rate Period, provided you abide by the Terms and conditions set forth in the Residential Equity Line of Credit Agreement, Note and Disclosure you will be required to sign at closing, your Annual Percentage Rate will be fixed for a set period of time. At the termination or expiration of the Introductory Rate Period your Annual Percentage Rate calculation will change to the method described elsewhere in this disclosure. You may be required to maintain a minimum outstanding principal balance on your loan in order to receive the Introductory Loan Rate, and you may be required to satisfy other conditions such as a maximum and/or minimum line of credit amount. Introductory Rate Periods, when available, are for owner-occupied primary residences only and are a onetime offer. Borrowers who have received a prior Introductory Rate on their current primary residence are not eligible for an Introductory Rate in the future. Ask us if we are currently offering an Introductory Rate Period and if we are, ask us about our current Annual Percentage Rate and eligibility requirements.

Minimum Line Amount for Introductory Rate offer is $25,000.00.

Maximum Rate and Payment Example—Draw Phase: If you had an outstanding balance of
$10,000 during the draw period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 11.000% would be $93.42. This annual percentage rate could be reached during the first month of the draw period.

Maximum Rate and Payment Example—Repayment Phase: If you had an outstanding balance of $10,000 at the beginning of the repayment period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 11.000% would be $176.76. This annual percentage rate could be reached during the first month of the repayment period.

Historical Example: The following table shows how the annual percentage rate and the minimum monthly 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 July 1st of each year. While only one payment amount per year is shown, payments would have varied during each year. The table assumes that no additional credit advances were taken, that only the minimum payments were made each month and that the rate remained constant during each year. This example does not necessarily indicate how the index or your payments will change in the future.

Historical Example Table

Year

Index

Margin*

Annual Percentage Rate

Monthly

2008

5.00%

-.50%

4.50%

$50.00***

2009

3.25%

-.50%

3.25%**

$50.00***

2010

3.25%

-.50%

3.25%**

$50.00***

2011

3.25%

-.50%

3.25%**

$50.00***

2012

3.25%

-.50%

3.25%**

$50.00***

2013

3.25%

-.50%

3.25%**

$50.00***

2014

3.25%

-.50%

3.25%**

$50.00***

2015

3.25%

-.50%

3.25%**

$50.00***

2016

3.50%

-.50%

3.25%**

$50.00***

2017

4.25%

-.50%

3.75%

$50.00***

Repayment Period

2018

5.00%

-.50%

4.50%

$109.69

2019

5.50%

-.50%

5.00%

$99.45

2020

3.25%

-.50%

3.25%**

$71.08

2021

3.25%

-.50%

3.25%**

$62.18

2022

4.75%

-.50%

4.25%

$60.70


* This is a margin we have used recently.
** Reflects the Interest Rate “Floor” charged under the agreement.
*** Reflects the minimum monthly payment requirement of $50.00.

As of the expiration date of the line of credit, the bank may demand payment of the line of credit, may rewrite the line of credit by agreement at a greater or lesser rate of interest: or may, by agreement, allow payments to be made on the line of credit at the same, or lesser or greater rate of interest.

Pursuant to Massachusetts General Law 184§17B:
1. The responsibility of the attorney for the Mortgagee is to protect the interest of the Mortgagee.
2. The Mortgagor may, at his/her own expense, engage an attorney of his/her own selection to represent his/her own interests in the transaction.