NBT Bank, National Association 52 South Broad Street Norwich, NY 13815

Transcription

1 IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT Principal and Interest NBT Bank, National Association 52 South Broad Street Norwich, NY This disclosure contains important information about our Principal and Interest Home Equity Line of Credit (the Plan or the Credit Line ). You should read it carefully and keep a copy for your records. AVAILABILITY OF TERMS. All of the terms of the Plan described herein are subject to change. 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: a) You commit fraud or make a material misrepresentation at any time in connection with the Plan. This can include, for example, a false statement about your income, assets, liabilities, or any other aspect of your financial condition. b) You do not meet the repayment terms of the Plan. c) Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral. This can include, for example, failure to maintain required insurance, waste or destructive use of the dwelling, failure to pay taxes, death of all persons liable on the account, transfer of title or sale of the dwelling, creation of a senior lien on the dwelling without our permission, foreclosure by the holder of another lien or the use of funds or the dwelling for prohibited purposes. 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: (a) The value of your dwelling declines significantly below the dwelling s appraised value for purposes of the Plan. This includes, for example, a decline such that the initial difference between the credit limit and the available equity is reduced by fifty percent and may include a smaller decline depending on the individual circumstances. (b) We reasonably believe that you will be unable to fulfill your payment obligations under the Plan due to a material change in your financial circumstances. Page 1 of 7 Form / C /

2 (c) You are in default under any material obligation of the Plan. We consider all of your obligations to be material. Categories of material obligations include, but are not limited to, the events described above under Termination and Acceleration, obligations to pay fees and charges, obligations and limitations on the receipt of credit advances, obligations concerning maintenance or use of the dwelling or proceeds, obligations to pay and perform the terms of any other deed of trust, mortgage or lease of the dwelling, obligations to notify us and to provide documents or information to us (such as updated financial information), obligations to comply with applicable laws (such as zoning restrictions). (d) We are precluded by government action from imposing the annual percentage rate provided for under the Plan. (e) 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 limit. (f) We have been notified by governmental authority that continued advances may constitute an unsafe and unsound business practice. (g) The maximum annual percentage rate under the Plan is reached. 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). At any time before the expiration of the draw period, upon our discretion, we may extend or modify the term of the draw period. Fees and Charges. In order to open and maintain an account, you may be required to pay certain fees and charges. Late Charge. Your payment will be late if it is not received by us within 15 days after the Payment Due Date shown on your periodic statement. If your payment is late, we may charge you 2.000% of the unpaid amount of the payment. Title Insurance Fees. Evidence of a mortgage title insurance policy is required as a condition for closing on all home equities over $250, The title insurance policy must cover the amount to be financed (at a minimum). Please contact the title insurance agency you have selected for more specific information pertaining to title insurance, including estimated cost. Third Party Fees. You may be required to pay certain third party closing costs paid by NBT Bank such as appraiser and government agency fees if you pay off and close the line of credit within three years. These third party fees generally total between $ and $4, We estimate the breakdown of these as follows: Description Amount When Charged Flood Determination Fee $9.00 Mortgage Tax (NY Only) $5.00-$7.50 per $1,000 Mortgage Recording Fee $60.00-$ Title Search Fee $85.00-$ Title Insurance Based on line amount Settlement Fee $ Appraisal Fee $ $ Tax Service Fee $99.00-$ Third party closing costs paid on your behalf by the Bank will be charged to you if and when you pay off and close the line of credit within 36 months of the Note Date. ITEMIZATION OF CREDIT LINE FEES. Upon request, we will provide you with an itemization of the fees you may have to pay for third party closing costs. Page 2 of 7 Form / C /

3 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: one Five (5) Year draw with one Five (5) Year Renewal draw period to eligible borrowers (the Draw Period ). An eligible borrower is one who has had no more than five payments that have been 30 or more days late in the initial draw period and whose line is not permanently suspended. After the Draw Period ends, the repayment period will begin and you will no longer be able to obtain credit advances. The length of the repayment period is as follows: Fifteen (15) Years. Your Regular Payment during the draw period will be a percentage of your outstanding principal balance, plus all accrued FINANCE CHARGES as shown below ( First Payment Stream ). Your payments will be due monthly. Range of Balances Number of Payments Regular Payment Calculation All balances % of your outstanding balance 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 will increase the amount of your Regular Payment. After completion of the First Payment Stream, your Regular Payment will be a percentage of your principal 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 % 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 will increase the amount of your Regular Payment. MINIMUM PAYMENT EXAMPLE FOR A FIRST LIEN OR JUNIOR LIEN POSITION BEHIND AN NBT BANK FIRST MORTGAGE. If you made only the minimum payment and took no other credit advances, it would take 20 years, at a minimum, to pay off a credit advance of $10, at an ANNUAL PERCENTAGE RATE of 3.750%. In the initial draw period, you would make 60 monthly payments ranging from $61.98 to $ Then you would make 179 monthly payments ranging from $40.16 to $62.07 and one final payment of $ MINIMUM PAYMENT EXAMPLE FOR A JUNIOR LIEN POSITION TO A NON-NBT BANK FIRST MORTGAGE. If you made only the minimum payment and took no other credit advances, it would take 20 years, at a minimum, to pay off a credit advance of $10, at an ANNUAL PERCENTAGE RATE of 4.000%. In the initial draw period, you would make 60 monthly payments ranging from $63.47 to $ Then you would make 179 monthly payments ranging from $40.18 to $63.55 and one final payment of $ TRANSACTION REQUIREMENTS. The following transaction limitations will apply to the use of your Credit Line: Credit Line Home Equity Line of Credit Check, Telephone Request, In Person Request and NBT Online Banker Limitations. There are no transaction limitations for the writing of Home Equity Line of Credit Checks, requesting an advance by telephone, requesting an advance in person or accessing by other methods. TAX DEDUCTIBILITY. You should consult a tax advisor regarding the deductibility of interest and charges for the Plan. Page 3 of 7 Form / C /

4 ADDITIONAL HOME EQUITY PROGRAMS. Please ask us about our other available Home Equity Line of Credit plans. 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 ) and a margin. The index is the Highest Prime Rate as published in the Wall Street Journal 30 days prior to the day of the Periodic Rate and the APR adjustment. Information about the Index is available or published in the Wall Street Journal. Adjustments to the Periodic Rate and the corresponding ANNUAL PERCENTAGE RATE resulting from changes in the Index will take effect on the 1 st day of the month. If the Index is no longer available, we will choose a new Index and margin. The new Index will have a 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 Daily Periodic Rate that will apply to your First Payment Stream, we add or subtract 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 Daily 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 Daily Periodic Rate that will apply to your Second Payment Stream, we add or subtract 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 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. INITIAL ANNUAL PERCENTAGE RATE DISCOUNT. If you qualify, the initial ANNUAL PERCENTAGE RATE may be discounted it is not based on the Index and margin used for later rate adjustments. Customers renewing an existing home equity line of credit from NBT Bank must apply and be approved for an additional $10,000 to qualify for the initial ANNUAL PERCENTAGE RATE discount. FOR A FIRST LIEN OR JUNIOR LIEN POSITION BEHIND AN NBT BANK FIRST MORTGAGE. If you qualify, you will receive an initial discount rate of 0.25% for 4 months. The fixed rate discount period will end 4 months from the date of your Loan Agreement. At that time the fixed rate of 0.25% will revert to the highest Prime Rate as published in the Wall Street Journal added to the appropriate margin identified as the "Margin plus the Index." If that rate is lower than the floor, the floor rate would prevail. FOR A JUNIOR LIEN POSITION TO A NON-NBT BANK FIRST MORTGAGE. If you qualify, you will receive an initial discount rate of 0.50% for 4 months. The fixed rate discount period will end 4 months from the date of your Loan Agreement. At that time the fixed rate of 0.50% will revert to the highest Prime Rate as published in the Wall Street Journal added to the appropriate margin identified as the "Margin plus the Index." If that rate is lower than the floor, the floor rate would prevail. AUTOMATIC PAYMENT DEDUCTION DISCOUNT. You may have your monthly payments deducted from your NBT Bank Checking Account or Money Market account. If at loan closing, you authorize your payments to be deducted from your NBT Bank Checking or Money Market account, your ANNUAL PERCENTAGE RATE will include a 0.50% reduction. The rate reduction will not take place during the initial discount period. If you cancel your automatic payment deduction authorization, the reduction in the rate will be discontinued and your rate will increase by the percentage of the reduction for the remainder of the credit line. Page 4 of 7 Form / C /

5 Please ask us for the current Index value, margin, discount and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you. CONVERSION OPTION. The Plan contains an option to convert a portion or all of your Credit Line from a variable rate with ANNUAL PERCENTAGE RATE limits to a fixed rate as determined below. The following information is representative of conversion option features recently offered by us: ANNUAL PERCENTAGE RATE Increase. Your ANNUAL PERCENTAGE RATE on the converted portion of your line may increase if you exercise this option to convert it to a fixed rate. Conversion Periods. You can exercise the option to convert your Credit Line to a fixed interest rate, fixedterm loan (a Fixed Rate Option ) during the draw period of your Home Equity Line of Credit. The following terms apply to each Fixed Rate Option: During the Draw Period, you may use the Fixed Rate Option to establish a Fixed Rate Loan within your account. A Fixed Rate Loan will have a fixed interest rate and specified term, and allows you to repay a specified loan amount in substantially equal consecutive monthly payments. A Fixed Rate Loan may be for any amount between the minimum of $5, and the amount of credit available to you (up to the credit limit established for your Account) at the time you exercise the Fixed Rate Option. If you convert a portion of your line to a fixed rate loan, your Account will consist of a variable interest rate portion (reflecting activity in the variable interest rate Line of Credit) and a fixed interest rate loan portion (reflecting the Advance(s) against the Line which you have elected to repay in the form of a fixed rate-specified term loan(s)). Your monthly statement will reflect both portions of the Account. You can exercise the option to convert to a fixed interest rate only during the following period or periods: during the Draw Period Only. Conversion Fees. You will be required to pay the following fees at the time of conversion to a fixed rate: For each request that you make the fee is $ Rate Determination. The fixed rate on the converted portion will be determined as follows: The interest rates that are available will be the rates from our current Fixed Rate Conversion loan product. Conversion Rules. You can convert to a fixed rate only during the period or periods described above. In addition, the following rules apply to the Fixed Rate Option under this Agreement: a. You are in the Draw Period; and b. No default exists under the terms of this Agreement; and c. You sign any forms that may be required by the Bank to confirm your decision to exercise the Fixed Rate Option. FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS. Your ANNUAL PERCENTAGE RATE can change monthly. 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 % per annum or, except for any initial discount period, be below 3.750% per annum at any time during the term of the Plan. MAXIMUM RATE AND PAYMENT EXAMPLE. Draw Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of % would be $ This ANNUAL PERCENTAGE RATE could be reached by the 5 th payment. Page 5 of 7 Form / C /

6 Repayment Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of % would be $ This maximum ANNUAL PERCENTAGE RATE could be reached at the time of the 1 st payment during the repayment period. PREPAYMENT. You may prepay all or any amount owing under the Plan without penalty. You may be required to pay certain third party closing costs paid by NBT Bank if you pay off and close your line of credit within the first 3 years. Termination fees consist of all third party closing costs paid on your behalf by the Bank. HISTORICAL EXAMPLE. The following Index Tables show how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10, credit advance would have changed based on changes in the Index from 2003 to The Index values are from the following reference period: The highest Prime Rate from the first week in January from the Wall Street Journal. 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 tables assume that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during the year. They do not necessarily indicate how the Index or your payments would change in the future. INDEX TABLE - FIRST LIEN OR JUNIOR LIEN POSITION BEHIND AN NBT BANK FIRST MORTGAGE Year ANNUAL Monthly (The highest Prime Rate from Index Margin (1) PERCENTAGE Payments the first week in January from (Percent) (Percent) RATE (Dollars) the Wall Street Journal) (2) (2) Draw Period Repayment Period (3) (3) (3) (3) (3) (3) (3) (1) This is a margin we have used recently; your margin may be different. (2) This ANNUAL PERCENTAGE RATE and monthly payment reflect a discount that we have provided recently; your Plan may be discounted by a different amount. Without the initial annual percentage rate discount the ANNUAL PERCENTAGE RATE would be 8.750%, resulting in a monthly payment of $ (3) The stated ANNUAL PERCENTAGE RATE represents the floor rate. MARGIN. The margin shown above is for the highest FICO tier when the Credit Line is in a first lien or junior lien position behind an NBT Bank first mortgage and the payment is automatically deducted from your NBT Bank Checking or Money Market account. Page 6 of 7 Form / C /

7 INDEX TABLE JUNIOR LIEN POSITION TO A NON-NBT BANK FIRST MORTGAGE Year (The highest Prime Rate from the first week in January from the Wall Street Journal) Draw Period Index (Percent) Margin (1) (Percent) ANNUAL PERCENTAGE RATE Monthly Payments (Dollars) (2) 59.25(2) Repayment Period (3) (3) (3) (3) (3) (3) (1) This is a margin we have used recently; your margin may be different. (2) This ANNUAL PERCENTAGE RATE and monthly payment reflect a discount that we have provided recently; your Plan may be discounted by a different amount. Without the initial annual percentage rate discount the ANNUAL PERCENTAGE RATE would be 9.000%, resulting in a monthly payment of $ (3) The stated ANNUAL PERCENTATE RATE represents the floor rate. MARGIN. The margin shown above is for the highest FICO tier when the Credit Line is in a junior lien position to a Non-NBT Bank first mortgage and the payment is automatically deducted from your NBT Bank Checking or Money Market account. Page 7 of 7 Form / C /

8 IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT Interest Only NBT Bank, National Association 52 South Broad Street Norwich, NY This disclosure contains important information about our Interest Only Home Equity Line of Credit (the Plan or the Credit Line ). You should read it carefully and keep a copy for your records. AVAILABILITY OF TERMS. All of the terms of the Plan described herein are subject to change. 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: (a) You commit fraud or make a material misrepresentation at any time in connection with the Plan. This can include, for example, a false statement about your income, assets, liabilities, or any other aspect of your financial condition. (b) You do not meet the repayment terms of the Plan. (c) Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral. This can include, for example, failure to maintain required insurance, waste or destructive use of the dwelling, failure to pay taxes, death of all persons liable on the account, transfer of title or sale of the dwelling, creation of a senior lien on the dwelling without our permission, foreclosure by the holder of another lien or the use of funds or the dwelling for prohibited purposes. 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: (a) The value of your dwelling declines significantly below the dwelling s appraised value for purposes of the Plan. This includes, for example, a decline such that the initial difference between the credit limit and the available equity is reduced by fifty percent and may include a smaller decline depending on the individual circumstances. (b) We reasonably believe that you will be unable to fulfill your payment obligations under the Plan due to a material change in your financial circumstances. Page 1 of 7 Form / C /

9 (c) You are in default under any material obligation of the Plan. We consider all of your obligations to be material. Categories of material obligations include, but are not limited to, the events described above under Termination and Acceleration, obligations to pay fees and charges, obligations and limitations on the receipt of credit advances, obligations concerning maintenance or use of the dwelling or proceeds, obligations to pay and perform the terms of any other deed of trust, mortgage or lease of the dwelling, obligations to notify us and to provide documents or information to us (such as updated financial information), obligations to comply with applicable laws (such as zoning restrictions). (d) We are precluded by government action from imposing the annual percentage rate provided for under the Plan. (e) 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 limit. (f) We have been notified by governmental authority that continued advances may constitute an unsafe and unsound business practice. (g) The maximum annual percentage rate under the Plan is reached. 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). At any time before the expiration of the draw period, upon our discretion, we may extend or modify the term of the draw period. Fees and Charges. In order to open and maintain an account, you may be required to pay certain fees and charges. Late Charge. Your payment will be late if it is not received by us within 15 days after the Payment Due Date shown on your periodic statement. If your payment is late, we may charge you 2.000% of the unpaid amount of the payment. Title Insurance Fees. Evidence of a mortgage title insurance policy is required as a condition for closing on all home equities over $250, The title insurance policy must cover the amount to be financed (at a minimum). Please contact the title insurance agency you have selected for more specific information pertaining to title insurance, including estimated cost. Third Party Fees. You may be required to pay certain third party closing costs paid by NBT Bank such as appraiser and government agency fees if you pay off and close the line of credit within three years. These third party fees generally total between $ and $4, We estimate the breakdown of these as follows: Description Amount When Charged Mortgage Recording Fee $60.00-$ Title Search Fee $85.00-$ Third party closing costs paid Appraisal Fee $ $ on your behalf by the Bank will Title Insurance Based on line amount be charged to you if and when Settlement Fee $ you pay off and close the line of Mortgage Tax (NY Only) $5.00-$7.50 per $1,000 credit within 36 months of the Flood Determination Fee $9.00 Note Date. Tax Service Fee $ $ ITEMIZATION OF CREDIT LINE FEES. Upon request, we will provide you with an itemization of the fees you may have to pay for third party closing costs. Page 2 of 7 Form / C /

10 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: one Five (5) Year draw with one Five (5) Year Renewal draw period to eligible borrowers (the Draw Period ). An eligible borrower is one who has had no more than five payments that have been 30 or more days late in the initial draw period and whose line is not permanently suspended. After the Draw Period ends, the repayment period will begin and you will no longer be able to obtain credit advances. The length of the repayment period is as follows: Fifteen (15) Years. Your Regular Payment during the draw period will equal the amount of your accrued FINANCE CHARGES ( First Payment Stream ). You will make of these payments. Your payments will be due monthly. Your Minimum Payment will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE will increase the amount of your Regular Payment. The Minimum Payment during the First Payment Stream will not reduce the principal that is outstanding on your Credit Line. After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your principal 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 % of your outstanding 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 will increase the amount of your Regular Payment. MINIMUM PAYMENT EXAMPLE FOR A FIRST LIEN OR JUNIOR LIEN POSITION BEHIND AN NBT BANK FIRST MORTGAGE. If you made only the minimum payment and took no other credit advances, it would take 20 years, at a minimum, to pay off a credit advance of $10, at an ANNUAL PERCENTAGE RATE of 3.750%. In the initial draw period, you would make 60 monthly payments ranging from $28.77 to $ Then you would make 179 monthly payments ranging from $55.92 to $86.42 and one final payment of $ MINIMUM PAYMENT EXAMPLE FOR A JUNIOR LIEN POSITION TO A NON-NBT BANK FIRST MORTGAGE. If you made only the minimum payment and took no other credit advances, it would take 20 years, at a minimum, to pay off a credit advance of $10, at an ANNUAL PERCENTAGE RATE of 4.000%. In the initial draw period, you would make 60 monthly payments ranging from $30.69 to $ Then you would make 179 monthly payments ranging from $55.94 to $88.48 and one final payment of $ TRANSACTION REQUIREMENTS. The following transaction limitations will apply to the use of your Credit Line: Credit Line Home Equity Line of Credit Check, Telephone Request, In Person Request and Online Banker Limitations. There are no transaction limitations for the writing of Home Equity Line of Credit Checks, requesting an advance by telephone, requesting an advance in person or accessing by other methods. TAX DEDUCTIBILITY. You should consult a tax advisor regarding the deductibility of interest and charges for the Plan. ADDITIONAL HOME EQUITY PROGRAMS. Please ask us about our other available Home Equity Line of Credit plans. Page 3 of 7 Form / C /

11 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 ) and a margin. The index is the Highest Prime Rate as published in the Wall Street Journal 30 days prior to the day of the Periodic Rate and the APR adjustment. Information about the Index is available or published in the Wall Street Journal. Adjustments to the Periodic Rate and the corresponding ANNUAL PERCENTAGE RATE resulting from changes in the Index will take effect on the 1 st day of the month. If the Index is no longer available, we will choose a new Index and margin. The new Index will have a 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 Daily Periodic Rate that will apply to your First Payment Stream, we add or subtract 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 Daily 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 Daily Periodic Rate that will apply to your Second Payment Stream, we add or subtract 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 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. INITIAL ANNUAL PERCENTAGE RATE DISCOUNT. If you qualify, the initial ANNUAL PERCENTAGE RATE may be discounted it is not based on the Index and margin used for later rate adjustments. Customers renewing an existing home equity line of credit from NBT Bank must apply and be approved for an additional $10,000 to qualify for the initial ANNUAL PERCENTAGE RATE discount. FOR A FIRST LIEN OR JUNIOR LIEN POSITION BEHIND AN NBT BANK FIRST MORTGAGE. If you qualify, you will receive an initial discount rate of 0.25% for 4 months. The fixed rate discount period will end 4 months from the date of your Loan Agreement. At that time the fixed rate of 0.25% will revert to the highest Prime Rate as published in the Wall Street Journal added to the appropriate margin identified as the "Margin plus the Index." If that rate is lower than the floor, the floor rate would prevail. FOR A JUNIOR LIEN POSITION TO A NON-NBT BANK FIRST MORTGAGE. If you qualify, you will receive an initial discount rate of 0.50% for 4 months. The fixed rate discount period will end 4 months from the date of your Loan Agreement. At that time the fixed rate of 0.50% will revert to the highest Prime Rate as published in the Wall Street Journal added to the appropriate margin identified as the "Margin plus the Index." If that rate is lower than the floor, the floor rate would prevail. AUTOMATIC PAYMENT DEDUCTION DISCOUNT. You may have your monthly payments deducted from your NBT Bank Checking account or Money Market account. If at loan closing, you authorize your payments to be deducted from your NBT Bank Checking or Money Market account, your ANNUAL PERCENTAGE RATE will include a 0.50% reduction. The rate reduction will not take place during the initial discount period. If you cancel your automatic payment deduction authorization, the reduction in the rate will be discontinued and your rate will increase by the percentage of the reduction for the remainder of the credit line. Please ask us for the current Index value, margin, discount and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you. Page 4 of 7 Form / C /

12 CONVERSION OPTION. The Plan contains an option to convert a portion or all of your Credit Line from a variable rate with ANNUAL PERCENTAGE RATE limits to a fixed rate as determined below. The following information is representative of conversion option features recently offered by us: ANNUAL PERCENTAGE RATE Increase. Your ANNUAL PERCENTAGE RATE on the converted portion of your line may increase if you exercise this option to convert it to a fixed rate. Conversion Periods. You can exercise the option to convert your Credit Line to a fixed interest rate, fixed-term loan (a Fixed Rate Option ) during the draw period of your Home Equity Line of Credit. The following terms apply to each Fixed Rate Option: During the Draw Period, you may use the Fixed Rate Option to establish a Fixed Rate Loan within your account. A Fixed Rate Loan will have a fixed interest rate and specified term, and allows you to repay a specified loan amount in substantially equal consecutive monthly payments. A Fixed Rate Loan may be for any amount between the minimum of $5, and the amount of credit available to you (up to the credit limit established for your Account) at the time you exercise the Fixed Rate Option. If you convert a portion of your line to a fixed rate loan, your Account will consist of a variable interest rate portion (reflecting activity in the variable interest rate Line of Credit) and a fixed rate loan portion (reflecting the Advance(s) against the Line which you have elected to repay in the form of a fixed rate-specified term loan(s)). Your monthly statement will reflect both portions of the Account. You can exercise the option to convert to a fixed interest rate only during the following period or periods: during the Draw Period Only. Conversion Fees. You will be required to pay the following fees at the time of conversion to a fixed rate: For each request that you make the fee is $ Rate Determination. The fixed rate on the converted portion will be determined as follows: The interest rates that are available will be the rates from our current Fixed Rate Conversion loan product. Conversion Rules. You can convert to a fixed rate only during the period or periods described above. In addition, the following rules apply to the Fixed Rate Option under this agreement: a. You are in the Draw Period; and b. No default exists under the terms of this Agreement; and c. You sign any forms that may be required by the Bank to confirm your decision to exercise the Fixed Rate Option. FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS. Your ANNUAL PERCENTAGE RATE can change monthly. 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 % per annum or, except for any initial discount period, be below 3.750% per annum at any time during the term of the Plan. MAXIMUM RATE AND PAYMENT EXAMPLE. Draw Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of % would be $ This ANNUAL PERCENTAGE RATE could be reached by the 5 th payment. Repayment Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of % would be $ This maximum ANNUAL PERCENTAGE RATE could be reached at the time of the 1 st payment during the repayment period. Page 5 of 7 Form / C /

13 PREPAYMENT. You may prepay all or any amount owing under the Plan without penalty. You may be required to pay certain third party closing costs paid by NBT Bank if you pay off and close your line of credit account within the first 3 years. Termination fees consist of all third party closing costs paid on your behalf by the Bank. HISTORICAL EXAMPLE. The following Index Tables show how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10, credit advance would have changed based on changes in the Index from 2003 to The Index values are from the following reference period: The highest Prime Rate from the first week in January from the Wall Street Journal. 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 tables assume that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during the year. They do not necessarily indicate how the Index or your payments would change in the future. INDEX TABLE - FIRST LIEN OR JUNIOR LIEN POSITION BEHIND AN NBT BANK FIRST MORTGAGE Year (The highest Prime ANNUAL Monthly Rate from the first week Index Margin (1) PERCENTAGE Payments in January from the Wall (Percent) (Percent) RATE (Dollars) Street Journal) (2) 2.12 (2) Draw Period Repayment Period (3) (3) (3) (3) (3) (3) (3) (1) This is a margin we have used recently; your margin may be different. (2) This ANNUAL PERCENTAGE RATE and monthly payment reflect a discount that we have provided recently; your Plan may be discounted by a different amount. Without the initial annual percentage rate discount the ANNUAL PERCENTAGE RATE would be 8.750%, resulting in a monthly payment of $ (3) The stated ANNUAL PERCENTAGE RATE represents the floor rate. MARGIN. The margin shown above is for the highest FICO tier when the Credit Line is in a first lien or junior lien position behind an NBT Bank first mortgage and the payment is automatically deducted from your NBT Bank Checking or Money Market account. Page 6 of 7 Form / C /

14 INDEX TABLE - JUNIOR LIEN POSITION TO A NON-NBT BANK FIRST MORTGAGE Year (The highest Prime Rate ANNUAL Index Margin (1) from the first week in PERCENTAGE (Percent) (Percent) January from the Wall RATE Street Journal) Draw Period Repayment Period Monthly Payments (Dollars) (2) 4.25 (2) (3) (3) (3) (3) (3) (3) (1) This is a margin we have used recently; your margin may be different. (2) This ANNUAL PERCENTAGE RATE and monthly payment reflect a discount that we have provided recently; your Plan may be discounted by a different amount. Without the initial annual percentage rate discount the ANNUAL PERCENTAGE RATE would be 9.000%, resulting in a monthly payment of $ (3) The stated ANNUAL PERCENTAGE RATE represents the floor rate. MARGIN. The margin shown above is for the highest FICO tier when the Credit Line is in a junior lien position to a Non-NBT Bank first mortgage and the payment is automatically deducted from your NBT Bank Checking or Money Market account. Page 7 of 7 Form / C /

15 Key Facts About Your Interest-Only Home Equity Line of Credit This information can help you decide if an interest-only Home Equity Line of Credit is right for you. Interest-Only Home Equity Lines An interest-only line allows you to pay only the interest on the money you borrowed for the first few years of the loan. This is known as the interest-only period (for example, the first five years of the loan). If you only pay the amount of interest that is due, once the interest-only period ends: You will still owe the original amount you borrowed Your monthly payment will increase-even if interest rates stay the same-because you must pay back the principal as well as the interest. Ask what the payments on your loan will be after the end of the interest-only period. If you are considering an adjustable rate loan, ask what your payments can be if interest rates increase. Addition Information Home Equity-Home equity is created when the value of your home increases and/or when you reduce the amount you owe on your home through your loan payments. If your home does not increase in value and you make interest only payments, you are not building equity. This may make it harder to refinance your mortgage, or to receive funds from the sale of your home. In fact, if the amount you owe on your home, along with the costs associated with selling it (such as real estate commissions and closing costs) exceeds the sales price, you will not receive any cash when you sell, and will have to pay additional funds to your lender or other parties when you pay off your mortgage. Prepayment Penalties-Some home equity lines of credit have prepayment penalties. If you sell your home or refinance your loan during the prepayment period, you could owe additional fees or a penalty. Ask whether your home equity line has a prepayment penalty and if so, how much it could be. Most home equity lines let you make extra, additional principal payments with your monthly payment. This is not considered a prepayment of the line and there is usually no penalty for these extra amounts. Form / C /

16 Consumer Lending Account Opening Disclosure MILITARY LENDING ACT DISCLOSURE Federal law provides important protections to members of the Armed Forces and their dependents relating to extensions of consumer credit. In general, the cost of consumer credit to a member of the Armed Forces and his or her dependent may not exceed an annual percentage rate of 36%. This rate must include, as applicable to the credit transaction or account: the costs associated with credit insurance premiums; fees for ancillary products sold in connection with the credit transaction; any application fee charged; and any participation fee charged (other than certain participation fees for a credit card account). Federal law requires that members of the Armed Forces and their dependents receive a clear description of required payments for their loan. Please review the loan disclosures and credit agreement carefully to understand the payment obligations. To receive the above information orally, please call toll-free: ext TELEPHONE CONSUMER PROTECTION ACT DISCLOSURE When you give us your mobile phone number, you are giving us your permission to contact you at that number about all of your NBT Bank accounts. Your permission allows us to use text messaging, artificial or prerecorded voice messages and automatic dialing technology for informational and account service calls. This could include contact from companies working on behalf of NBT Bank to service your accounts. This does not allow us to use text messaging, artificial or prerecorded voice messages and automatic dialing technology for telemarketing or sales calls. Message and data rates from your mobile provider may apply. Please call us at if you wish to change or revoke these permissions. INSURANCE DISCLOSURE If you are applying for a loan product that is eligible for credit insurance, the disclosures below are required by law. You may be solicited, offered, or sold an insurance product or annuity. We may not condition an extension of credit on either your purchase of insurance or annuities from the bank or our affiliates or your agreement not to obtain, or a prohibition on you from obtaining, insurance or annuities from a person or company that is not affiliated with the bank; The insurance or annuities are not a deposit or other obligation of or guaranteed by the bank or our affiliates; The insurance or annuities are not insured by the Federal Deposit Insurance Corporation (FDIC) or any other agency of the United States, the bank, or our affiliates, and; There is investment risk associated with annuities and life insurance, including the possible loss of value. You acknowledge that the foregoing insurance disclosures were provided to you orally and in writing at the time you applied for an extension of credit and before the initial sale of insurance or annuities was completed. In addition, you acknowledge receipt of the Military Lending Act and the Telephone Consumer Protection Act Disclosures as presented above. Form / C /

17 What you should know about home equity lines of credit January 2014

18 This booklet was initially prepared by the Board of Governors of the Federal Reserve System. The Consumer Financial Protection Bureau (CFPB) has made technical updates to the booklet to reflect new mortgage rules under Title XIV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). A larger update of this booklet is planned in the future to reflect other changes under the Dodd-Frank Act and to align with other CFPB resources and tools for consumers as part of the CFPB s broader mission to educate consumers. Consumers are encouraged to visit the CPFB s website at consumerfinance.gov/owning-ahome to access interactive tools and resources for mortgage shoppers, which are expected to be available beginning in WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT

19 Table of contents Table of contents Introduction Home equity plan checklist What is a home equity line of credit? What should you look for when shopping for a plan? Costs of establishing and maintaining a home equity line How will you repay your home equity plan? Line of credit vs. traditional second mortgage loans What if the lender freezes or reduces your line of credit? Appendix A: Defined terms Appendix B: More information...15 Appendix C: Contact information WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT

20 1. Introduction If you are in the market for credit, a home equity plan is one of several options that might be right for you. Before making a decision, however, you should weigh carefully the costs of a home equity line against the benefits. Shop for the credit terms that best meet your borrowing needs without posing undue financial risks. And remember, failure to repay the amounts you ve borrowed, plus interest, could mean the loss of your home. 1.1 Home equity plan checklist Ask your lender to help you fill out this worksheet. Basic features for comparison Plan A Plan B Fixed annual percentage rate % % Variable annual percentage rate % % Index used and current value % % Amount of margin Frequency of rate adjustments Amount/length of discount (if any) Interest rate cap and floor Length of plan Draw period 4 WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT