Universal Credit Application€¦ · l Universal Credit Application (Consumer Real Estate) 4....

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Universal Credit Application(Consumer Real Estate)

4. Applicant Information

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Individual Credit. If checked, this is an Application for Individual Credit - relying solely on my income and assets.lIndividual Credit with Another. If checked, this is an Application for Individual Credit - relying on my income and assets andon income and/or assets of another as a basis for loan qualification. (Complete Applicant and Co-Applicant sections.)

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Individual Credit (Community Property State). If checked, this is an Application for Individual Credit - relying on my income orassets. The income or assets of my spouse (or other person), who has community property rights pursuant to state law, willnot be used as a basis for loan qualification. However, his or her liabilities must be considered because my spouse (or otherperson) has community property rights pursuant to applicable law, and, as Applicant, I reside in a community property state,the property that will secure the loan is located in a community property state, or I am relying on other property located in acommunity property state as a basis for repayment of the loan. (Complete Applicant and Co-Applicant sections.)

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Co-Applicant for Joint CreditApplicant for Joint Credit

1. Type of Application

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Joint Credit. If checked, this is an Application for Joint Credit. By signing below, the Applicant and Co-Applicant agree thateach of us intend to apply for joint credit. (Complete Applicant and Co-Applicant sections.)

Rentl

2. Type of Mortgage and Terms of Credit

CelllPrimary Phone

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Co-Applicant's Name

Former Address

Date of Birth

E-mail Address

Social Security No.

Exp. Date

Mailing Address, if different from Present Address

Present Address

Rent

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Mailing Address, if different from Present Address

No. Yrs.lFormer Address Own

Cell

No. Yrs.l

Applicant's Name

Primary Phone

E-mail Address

Social Security No.

ID Type & No.

Date of Birth

Exp. Date ID Type & No.

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No.

Separatedl Married

l Ages

Dependents

(not listed by Co-Applicant)

Unmarried (including single, divorced, widowed)

No.

Separatedl Married

l Ages

Dependents

(not listed by Applicant)

Unmarried (including single, divorced, widowed)

Lender's Case No.

lPresent Address

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Rent No. Yrs.l Own lOwn

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Issued By

lRent No. Yrs.l Own l

Issue DateIssued By Issue Date

Home Purchase or Refinancing

(Check only one of the four checkboxes; and sign, if joint credit. Use another application if more than two applicants.)

No. of Units

Property will be:

Subject Property Address (street, city, state & ZIP)

Legal Description of Subject Property (attach description if necessary)

Purpose of Loan

Purchase

Refinance

Construction

Construction-Permanent

Other: lPrimary

Residence

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Secondary

Residence

Investment

Complete this line if construction or construction-permanent loan.

Year Lot

Acquired

Original Cost

Amount Existing

Liens

(a) Present Value of

Lot

(b) Cost of

Improvements

Total (a + b)

%

$

$

Complete this line if this is a refinance loan.

Year

Acquired

Original Cost Purpose of Refinance

Describe Improvements

Amount Existing

Liens

lmade to be made

Cost: $

Estate will be held in:

$ $

3. Property Information and Purpose of Credit

Title will be held in what Name(s)

Source of Down Payment, Settlement Charges, and/or Subordinate Financing (explain)

Manner in which Title will be held

Fee Simplell

ll

l

Year Built

$

$

l

l

ll

Amortization Type

$

No. of Months

ARM$ l l lFixed

Amount/Credit Limit Interest Rate

Leasehold (show

expiration date)

Home Equity Line of Credit

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ll

Home Equity Loan

Mortgage Applied For

- 2012Wolters Kluwer Financial Services

Universal Credit Application-Real EstateVMPBankers Systems* , UCA-RE 8/1/2014

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VMPC148R (1408).00

Co-ApplicantApplicant

-

6. Monthly Income and Combined Housing Expense Information

Name & Address of Employer

If employed in current position for less than two years or if currently employed in more than one position, complete the following:


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Position/Title/Type of Business

Self Employed

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Self Employed Yrs. on this job


Name & Address of Employer l


Self Employed



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Yrs. on this job

Self Employed

Yrs. employed inthis line of

work/profession

Business Phone

Business Phone



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Business Phone

5. Employment Information Co-ApplicantApplicant

Dates (from - to)

Gross MonthlyIncome

Dates (from - to)

$

$

Gross MonthlyIncome

$

Gross MonthlyIncome

Base Empl. Income*

Overtime

Bonuses

Commissions

Dividends/Interest

Net Rental Income

Other(before completing, see

the notice in "Describe

Other Income," below)

Applicant

Monthly Amount

ProposedCombined MonthlyHousing Expense

$

Rent

First Mortgage (P&I)

Other Financing (P&I)

Hazard Insurance

Real Estate Taxes

Mortgage Insurance

Homeowner Assn.

Dues

Other

TotalTotal

$

Present

* Self Employed Applicant(s) may be required to provide additional documentation such as tax returns and financial statements.

Notice: Alimony, child support, or separate maintenance

income need not be revealed if the Applicant (A) or Co-Applicant (C)

does not choose to have it considered for repaying this loan.A/C

$

$

$

$

Describe Other

Income

$$

$

Co-Applicant Total

7. Assets and LiabilitiesThis Statement and any applicable supporting schedules may be completed jointly by both married and unmarried Co-Applicants iftheir assets and liabilities are sufficiently joined so that the Statement can be meaningfully and fairly presented on a combinedbasis; otherwise, separate Statements and Schedules are required. If the Co-Applicant section was completed about anon-applicant spouse or other person, this Statement and supporting schedules must also be completed about that spouse orother person.

l Not JointlyJointlyCompleted l

2012Wolters Kluwer Financial Services

Yrs. employed inthis line of

work/profession

Business Phone

Business Phone

Dates (from - to)

Business Phone

Gross MonthlyIncome

Dates (from - to)

$

Gross MonthlyIncome

$

Property Address (enter S if sold, PS if pending sale,R if rental for income or O for other)

Net Rental

Income

$

Type of

Property

Present

Market Value

Amount ofMortgages &

Liens

Gross Rental

Income

Mortgage

Payments

Insurance,Maintenance,Taxes & Misc.

List any additional names under which credit has previously been received and indicate appropriate creditor name(s) and accountnumber(s):

Creditor Name

$ $ $ $

Account NumberAlternate Name

Totals

$

$$ $ $ $$

Schedule of Real Estate Owned. (If additional properties are owned, use continuation sheet.)

Self Employed

l Self Employed

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$ $

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$ $

$$


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VMPC148R (1408).00

7. Assets and Liabilities (Continued)

$

Name and address of Bank, S&L, or Credit Union

Subtotal Liquid Assets

$

Revolving

$Payment/

Months

$

Name and address of Company


$

Alimony/Child Support/Separate

Maintenance Payments Owed to:

$

Total Liabilities (b)

Job-Related Expense

(child care, union dues, etc.)

$Payment/

Months

$Name and address of Company

$Payment/

Months


$Payment/

Months


Revolving

$Payment/

Months


Revolving

l

$

$

$

TotalAssets (a)

Net Worth(a - b) $

Revolving

$Stocks & Bonds (Company

name/number & description)

Real estate owned

(enter market value from

schedule of real estate owned)

$

$

Other Liabilities(from continuation page, if any)

Life Insurance net cash value

Face amount: $

$

Net worth of business(es) owned

(attach financial statement)$

Automobiles owned

(make and year)$

$

Total Monthly Payments


Vested interest in retirement

fund$

Liabilities and Pledged Assets. List the creditor's name, address, andaccount number for all outstanding debts, including automobile loans,revolving charge accounts, real estate loans, alimony, child support, stockpledges, etc. Use continuation sheet, if necessary. Indicate by (*) thoseliabilities, which will be satisfied upon sale of real estate owned or uponrefinancing of the subject property.

Monthly Payment &Months Left to PayList checking and savings accounts below

Description

$Payment/

Months

Liabilities

Assets Cash or MarketValue

$

Unpaid Balance


Cash deposit toward purchaseheld by:

Name and address of Company

$

$

$

Name and address of Bank, S&L, or Credit Union $Payment/

Months


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Revolving

l

8. Declarations

NoYes

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Are there any outstanding judgmentsagainst you?

Have you been declared bankruptwithin the past 10 years?

Have you had property foreclosedupon or given title or deed in lieuthereof in the last 7 years?

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a.

b.

c.

Co-Applicant

No

Are you a party to a lawsuit?d.

Yes

ll

Applicant

ll

NoYes

ll

ll

l l

Co-Applicant

NoYes

ll

ll

Applicant

Are you presently delinquent or indefault on any Federal debt or anyother loan, mortgage, financialobligation, bond, or loan guarantee?

f.

Have you directly or indirectly beenobligated on any loan which resultedin foreclosure, transfer of title in lieuof foreclosure, or judgment?

e.

llll

$

$

Other Assets (itemize)

Other Assets (from continuation page, if any)

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Revolving

Revolving

l

l

Acct. no. Acct. no. l

Acct. no.Acct. no.

Acct. no.

Acct. no. Acct. no.

Acct. no.

Acct. no.

Acct. no.

Acct. no.

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VMPC148R (1408).00

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8. Declarations (Continued)

Do you intend to occupy the propertyas your primary residence?

l.

Are you a permanent resident alien?

How did you hold title to thehome -- solely by yourself (S),jointly with your spouse (SP), or jointly with another person (O)?

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11. State Notices

9. Continuation and Additional InformationInstructions. Use this section if you need more space to complete the Universal Credit Application. Mark "A" for Applicantand "C" for Co-Applicant. Use this space if you answered "Yes" to any of the questions in Section 8.

10. Federal Notices

False Statements. By signing below, I/we fully understand that it is a federal crime punishable by fine or imprisonment, orboth, to knowingly make any false statements concerning any of the above facts as applicable under the provisions of Title 18,United States Code, Section 1001, et seq.

For Home Equity Line of Credit. The current annual percentage rate for finance charges and, ifthe rate may vary, a statement to that effect and of the circumstances under which the ratemay increase and whether there are any limitations on any such increase, as well as theeffects of any such increase; the conditions under which a finance charge may be imposed,including the time period within which any credit extended may be repaid without incurring afinance charge; whether any annual fee is charged and the amount of any such fee; andwhether any other charges or fees may be assessed, the purposes for which they areassessed, and the amounts of any such charges or fees.

Any person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or

files a claim containing a false or deceptive statement is guilty of insurance fraud.

(1)

What this means for you. When you apply for a loan or open an account, we will ask for your name, address, date of birth,and other information that will allow us to identify you. We may also ask to see your driver's license and/or other identifyingdocuments. In some instances, we may use outside sources to confirm the information. The information you provide isprotected by our privacy policy and federal law.

Important Information to Applicant(s). To help the government fight the funding of terrorism and money launderingactivities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person whoapplies for a loan or opens an account.

California Residents. Each applicant, if married, may apply for a separate account.

Massachusetts Residents. Under Massachusetts statute, Mass. Gen. L. ch. 184, Section 17B,you, the Applicant (and Co-Applicant) are entitled to know the following:1. The responsibility of the attorney for the Mortgagee is to protect the interest of theMortgagee.2. Mortgagors may, at their own expense, engage an attorney of their own selection torepresent their interests in the transaction.

Texas Residents. The owner of the homestead is not required to apply the proceeds of the extension of credit to repay another

debt except debt secured by the homestead or debt to another lender.

Ohio Residents. The Ohio laws against discrimination require all creditors make credit equally available to all creditworthy

customers, and that credit reporting agencies maintain separate credit histories on each individual upon request. The Ohio Civil

Rights Commission administers compliance with this law.

For married Wisconsin Residents. The credit being applied for, if granted, will be incurred in the interest of my marriage or family.

I understand the creditor may be required by law to give notice of this transaction to my spouse.

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NoYes

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NoYes m.Have you had an ownership interestin a property in the last three years? l

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Co-Applicant

NoYes

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l

llll

ll l

Co-Applicant

No

ll

Applicant

Yes

lIs any part of the down paymentborrowed?

h.What type of property did youown -- principal residence (PR),second home (SH), or investment property (IP)?

n.

Are you a U.S. citizen?j.

Are you a co-maker or endorser on anote?

i.

k.

l

l

Are there any other equity loans onthe property?

(2)l

Applicant

l l

llllAre you obligated to pay alimony, childsupport, or separate maintenance?

g.

New York Residents. A consumer report may be ordered in connection with your application. Upon your request, we will inform

you whether or not a report was ordered. If a report was ordered, we will tell you the name and address of the consumer

reporting agency that provided the report. Subsequent reports may be ordered or utilized in connection with an update, renewal

or extension of credit for which you have applied.

Wisconsin Residents. Notice to Married Applicants. No provision of any marital property agreement, unilateral statement under

Wisc. Statutes §766.59 or a court decree under Wisc. Statutes §766.70 adversely affects the interest of the lender unless the

lender, prior to the time the credit is granted, is furnished a copy of the agreement, statement or decree or has actual

knowledge of the adverse provision when the obligation to the lender is incurred.

Each of the undersigned specifically represents to Lender and to Lender's actual or potential agents, brokers, processors,attorneys, insurers, servicers, successors and assigns and agrees and acknowledges that: (1) the information provided in thisapplication is true and correct as of the date set forth opposite my signature and that any intentional or negligentmisrepresentation of this information contained in this application may result in civil liability, including monetary damages, to anyperson who may suffer any loss due to reliance upon any misrepresentation that I have made on this application, and/or incriminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code,Sec. 1001, et seq.; (2) the loan requested pursuant to this application (the "Loan") will be secured by a mortgage or deed of truston the property described in this application; (3) the property will not be used for any illegal or prohibited purpose or use; (4) allstatements made in this application are made for the purpose of obtaining a residential mortgage loan; (5) the property will beoccupied as indicated in this application; (6) the Lender, its servicers, successors or assigns may retain the original and/or anelectronic record of this application, whether or not the Loan is approved; (7) the Lender and its agents, brokers, insurers,servicers, successors and assigns may continuously rely on the information contained in the application, and I am obligated to

12. Acknowledgment and Agreement


Universal Credit Application-Real EstateVMPBankers Systems* ,

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VMPC148R (1408).00

For Mortgage Loan Originator

Instruction to Lender: Cross out this entire section (or instruct the applicant to do so), if this information is not required by lawfor this type of credit.

Sex: l

Co-Applicant

Ethnicity:

Race:

Sex:

lApplicant

Ethnicity:

Race:

lll

Female

I do not wish to furnish this information

Not Hispanic or Latino

American Indian or Alaska Native

Native Hawaiian or Other Pacific Islander

l Hispanic or Latino

l Male

l White

l l Black or

African

American

Asian

Acknowledgment. Each of the undersigned hereby acknowledges that any owner of the Loan, its servicers, successors andassigns, may verify or reverify any information contained in this application or obtain any information or data relating to the Loan,for any legitimate business purpose through any source, including a source named in this application or a consumer reportingagency.

12. Acknowledgment and Agreement (Continued)

DateDate Co-Applicant's SignatureApplicant's Signature

UCA-RE 8/1/2014 of 5

amend and/or supplement the information provided in this application if any of the material facts that I have represented hereinshould change prior to closing of the Loan; (8) in the event that my payments on the Loan become delinquent, the Lender, itsservicers, successors or assigns may, in addition to any other rights and remedies that it may have relating to such delinquency,report my name and account information to one or more consumer reporting agencies; (9) ownership of the Loan and/oradministration of the Loan account may be transferred with such notice as may be required by law; (10) neither Lender nor itsagents, brokers, insurers, servicers, successors or assigns has made any representation or warranty, express or implied, to meregarding the property or the condition or value of the property; and (11) my transmission of this application as an "electronicrecord" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audioand video recordings), or my facsimile transmission of this application containing a facsimile of my signature, shall be aseffective, enforceable and valid as if a paper version of this application were delivered containing my original written signature.

Decision

13. Information for Government Monitoring Purposes

The following information is requested by the Federal Government for certain types of loans related to a dwelling in order tomonitor the Lender's compliance with equal credit opportunity, fair housing and home mortgage disclosure laws. You are notrequired to furnish this information, but are encouraged to do so. The law provides that a lender may not discriminate either onthe basis of this information, or on whether you choose to furnish it. If you furnish the information, please provide both ethnicityand race. For race, you may check more than one designation. If you do not furnish ethnicity, race, or sex, under Federalregulations, the Lender is required to note the information on the basis of visual observation or surname. If you do not wish tofurnish the information, please check the box below.

Approved

l Subordinate Lien

l First Lien

l Second Lien

Lender's Initial Lien Position First Lien Holder's Name & Address (if any) Second Lien Holder's Name & Address (if any)

Date Application Received

In a telephone interview

Funding DateHMDA Reportable

Loan No.

Amount Requested

Amount Approved Initial Advance (if applicable)

Refinancing

High Priced Mortgagel l Cash OutYes

l

Yes

Yes

l Yes

ll Denied

l By the applicant and submitted via e-mail or the Internet

Loan Origination Company Identifier

l

In a face-to-face interviewlBy the applicant and submitted by fax or maill

This information

was provided:

Loan Originator's Signature

Loan Origination Company's AddressLoan Originator's Name

Loan Origination Company's Name

Loan Originator Identifier

Date Loan Originator's Phone Number

X

XX

For Lender's Use

l

ll

ll

Female

I do not wish to furnish this information

Not Hispanic or Latino

American Indian or Alaska Native

Native Hawaiian or Other Pacific Islander

l Hispanic or Latino

l Male

l White

l l Black or

African

American

Asian

Received By

Loan No.

Rescindable

Decision By

Early Disclosures Given

Decision Date

Transaction Worksheet - Optional

p. Cash from/to Applicant

(subtract j, k, l & o from i)j. Subordinate financing

m.Loan amount (exclude PMI, MIP,

Funding Fee financed)

n. PMI, MIP, Funding Fee financed

o. Loan amount (add m & n)

$

a. Purchase price

b. Alterations, improvements, repairs

c. Land (if acquired separately)

d. Refinance (include debts to be paid off)

e. Estimated prepaid items

f. Estimated closing costs

g. PMI, MIP, Funding Fee

h. Discount (if Applicant will pay)

i. Total costs (add items a through h)

k. Applicant's closing costs paid by Seller

l. Other Credits (explain)

Yesl Yes, onllHigh Cost Mortgage

Consent. You authorize us to contact you using any of the telephone numbers listed on this Credit Application or that yousubsequently provide us in connection with your credit account - regardless whether the number we use is assigned to a pagingservice, cellular telephone service, specialized mobile radio service or other radio common carrier service or any other service forwhich you may be charged for the call. You further authorize us to contact you through the use of voice, text and email andthrough the use of pre-recorded/artificial voice messages or an automated dialing device.

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$


Universal Credit Application-Real EstateVMPBankers Systems* ,

VMPC148R (1408).00

IMPORTANT INFORMATION ABOUT

WATERTOWN SAVINGS BANK'S HOME EQUITY LINE OF CREDIT

4.00% Depository Customer

This Disclosure contains important information about the Home Equity Line of Credit (the "Credit Line") at Watertown Savings Bank (the "Bank"). You should read it carefully and keep a copy for your records. 1. 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 the Bank, you are entitled to a refund of any fees that you paid in connection with your application. You should submit your application within 30 days of receipt of this disclosure. 2. 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. 3. Possible Actions. We can terminate your credit account and require you to pay us the entire outstanding balance in one payment and impose fees upon termination if: (a) you engage in fraud or material misrepresentation in connection with the Credit Line, (b) you do not meet the repayment terms of the Credit Line, or (c) your action or inaction adversely affects the property for the Credit Line or our security interest in the property. We can refuse to make additional extensions of credit or reduce your credit limit if: (d) the value of the real property securing the Credit Line declines significantly below its appraised value for purposes of the Credit Line, (e) we reasonably believe that you will not be able to meet the repayment obligations due to a material change in your financial circumstances, (f) you are in default of a material obligation of the Credit Line, (g) government action prevents us from imposing the annual percentage rate provided for in your Agreement with us or impairs our security interest such that the value of the interest is less than 120% of the Credit Line, (h) a government action prevents us from imposing the annual percentage rate provided for in your Agreement with us or impairs our security interest such that the value of the interest is less than 120% of the Credit Line, (i) a government authority has notified us that continued advances would constitute an unsafe business practice, or (j) we are entitled to terminate your Credit Line and to demand immediate payment in full under the terms of your Agreement with us, but have decided to take, temporarily, the alternative of prohibiting additional advances or of reducing the maximum credit limit. We will provide you, upon your request, a list of categories of contract obligations that we consider "material obligations" as mentioned in subsection (f) above. Generally, the terms of the Credit Line may not be changed except upon the mutual written consent of the Bank and you. However, we may change the terms of your Credit Line if the change is insignificant or if it is beneficial to you. We may also prohibit you from receiving additional advances or reduce your credit limit during any period in which the maximum annual percentage rate for your Credit Line is reached. 4. The term "finance charge" is the dollar amount that the loan will cost you and is intended to be synonymous with the word interest as used in this disclosure. 5. Minimum Payment Requirements. The term of the Credit Line for which you can obtain advances of credit, the "Draw Period", is the same as the overall term of the Credit Line and will depend upon the number of billing cycles agreed upon by you and the Bank under the payment plan described below. However, in no event will the term of the Credit Line exceed twenty years. Your payments will be due monthly and will include all interest then due on the principal balance, together with a principal payment to be calculated by dividing the loan at the end of the billing cycle by the number of billing cycles in the term of your Credit Line. However, the Bank will require a minimum payment of at least $200.00 each billing cycle. If the interest and principal balance outstanding at the end of the billing cycle is less than $200.00, you must make a minimum payment of the entire outstanding balance. The amount of interest included in each payment will be all of the interest owing as of the time the billing statement is prepared. The interest is computed by applying the daily periodic rate to the average daily balance and multiplying the result times the number of days in the billing cycle. The daily periodic rate is the applicable loan interest rate (annual percentage rate) in effect for that month divided by 365. Payments are credited first to interest, second to principal, and third to credit life insurance if you have purchased such insurance, and finally to late charges. The term of your Credit line may be between five and twenty years. As a result, you will be required to repay the entire principal balance and any accrued interest then owing by the end of the Credit Line term agreed upon by you and the Bank. Under most circumstances, the minimum payments will not repay the balance that is outstanding on your Credit Line by the end of the Credit Line term agreed upon by you and the Bank. You will then be required to pay the entire balance in a single payment. THE TERM OF YOUR CREDIT LINE WILL BE DETERMINED BY YOU AND THE BANK. BECAUSE OF THE "REVOLVING" NATURE OF YOUR CREDIT LINE, IN ADDITION TO YOUR MONTHLY PAYMENTS DESCRIBED IN THIS DOCUMENT, YOU WILL BE REQUIRED TO REPAY THE ENTIRE PRINCIPAL BALANCE OWING AT THE END OF YOUR CREDIT LINE TERM PLUS ANY ACCRUED INTEREST. THE BANK HAS NO OBLIGATION TO REFINANCE THIS CREDIT LINE AT THE END OF YOUR CREDIT LINE TERM. THEREFORE, YOU MAY BE REQUIRED TO REPAY THE BALANCE OF YOUR CREDIT LINE OUT OF ASSETS YOU OWN OR YOU MAY HAVE TO FIND ANOTHER LENDER WILLING TO REFINANCE THAT BALANCE. ASSUMING THIS BANK OR ANOTHER LENDER REFINANCES THE BALANCE AT MATURITY, YOU WILL PROBABLY BE CHARGED INTEREST AT MARKET RATES PREVAILING AT THAT TIME AND SUCH RATES MAY BE HIGHER THAN THE INTEREST RATE ON THIS CREDIT LINE. YOU MAY ALSO HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW CREDIT LINE MORTGAGE.

SEE REVERSE SIDE FOR ADDITIONAL DISCLOSURES _______________________________________________________ _______________________________________________________ Signature Date Signature Date

6. Minimum Payment Example. If you took a single $10,000.00 advance on the first day of your Credit Line, assuming that you did not purchase credit life insurance and assuming a fifteen year loan term and an ANNUAL PERCENTAGE RATE of 4.00% as the discounted introductory interest rate for the first thirty-six billing cycles, and then an ANNUAL PERCENTAGE RATE OF 4.25% “reflecting the minimum rate limitation at the thirty-seventh billing cycle”, it would take four years and seven months (55 billing cycles) to pay off the advance if you made only the minimum monthly payments. During that period, you would make 54 minimum payments of $200.00 and a final payment of $165.77. 7. Fees and Charges. To open and maintain a line of credit, you must pay certain fees to third parties. These fees generally range from $615.00 to $2,500.00, depending upon the amount of your credit limit and the location of the property securing your Credit Line. In addition, we require that you obtain property insurance on the property securing your Credit Line. The cost of title insurance and the amount of the mortgage recording tax shall be based on the maximum credit limit whether or not that amount is advanced. Upon request, we will provide you with a more detailed itemization of the fees you will have to pay third parties. Late Charges. If a payment is late (more than 15 days after due) you will be charged a 2% of the amount of the payment that is due. 8. Minimum Draw Requirement and Credit Limit. The minimum credit advance that you can receive is $500.00. The minimum credit limit available is $15,000.00. 9. Tax Deductibility. You should consult a tax advisor regarding the deductibility of interest and charges for the Credit Line. 10. Variable Rate Feature. The Credit Line has a variable rate feature, and the annual percentage rate (corresponding to the periodic rate) and the minimum monthly payment can change as a result. The initial percentage rate is discounted to 3.75% until the thirty-seventh billing cycle and includes only interest and no other costs. Negative amortization does not apply to this loan. Your initial percentage rate will be fixed for thirty-six complete billing cycles and will be based on market conditions at the time of closing. Beginning with the thirty-seventh complete billing cycle, the annual percentage rate will be based on the value of an index or the minimum floor rate. The index is the "Prime Rate" as published in the Wall Street Journal. When more than one Prime Rate may be published in any edition, the index will be the highest of the Prime Rates set forth. To determine the annual percentage rate that will apply to your Credit Line, we add a margin to the value of the index on the last Bank business day prior to the start of the billing cycle. Ask us for the current index value, margin, initial rate premium or discount, and annual percentage rate. After you open a Credit Line, rate information will be provided on periodic statements that we send you. 11. Rate Changes. The annual percentage rate will be fixed for the first thirty-six complete billing cycles. Beginning with the thirty-seventh billing cycle, the annual percentage rate may change each billing cycle. Billing cycles run approximately from the third Saturday of one month to the third Saturday of the next month. The minimum ANNUAL PERCENTAGE RATE that can apply after the thirty-sixth billing cycle and during the remaining term of the Credit Line is 3.99% and the maximum ANNUAL PERCENTAGE RATE that can apply during the term of the Credit Line is 14.90%. Apart from this rate “floor” and rate “cap” there is no limit on the amount by which the rate can change during any one-monthly period beginning with the thirty-seventh billing cycle. The minimum rate or the maximum rate can be reached in the thirty-seventh billing cycle of your Credit Line. 12. Minimum Rate and Maximum Rate and Payment Example. If you had an outstanding balance of $10,000.00 at the beginning of your loan term, assuming a fifteen-year loan term, the minimum monthly payment at the minimum ANNUAL PERCENTAGE RATE of 3.99% and at the maximum ANNUAL PERCENTAGE RATE OF 14.90% would be $200.00. This amount reflects the operation of the minimum payment amount of $200.00. Any amounts included in the minimum payment amount which are in excess of accrued interest, principal and credit life insurance premiums, if purchased, for the current month will be credited directly to principal. 13. Historical Example. The following table shows how the annual percentage rate and the minimum monthly payments for a single $10,000.00 cash advance would have changed based on changes in the index over the past fifteen years. The index values for the Prime Rate are from January of each year. While only one payment amount per year is shown, payments would have varied during each year. 14. No closing cost option. If you select the no closing cost option and this loan is terminated for any reason within three (3) years of the date of loan closing, borrowers agree to reimburse Lender for the total cost of these fees which were paid by Lender in connection with this loan. These fees will be payable, in full, upon demand by the Lender. The table assumes that (a) no additional credit advances were taken, (b) you did not purchase credit life or disability insurance, (c) only the minimum monthly payment was made, and (d) the annual percentage rate remained constant during each year. It does not necessarily indicate how the index or your payments would change in the future. YEAR INDEX (%) MARGIN+ APR PAYMENT 2003…………………………. 4.25 .00 3.99 200.00(*) 2004…………………………. 4.00 .00 3.99 2005………………………….. 5.75 .00 5.75 2006………………………….. 7.25 .00 7.25 2007………………………….. 8.25 .00 8.25 2008…………………………...7.25 .00 7.25 2009………………………….. 3.25 .00 3.99# 2010………………………….. 3.25 .00 3.99# 2011…………………………...3.25 .00 3.99# 2012…………………………. .3.25 .00 3.99# 2013………………………….. 3.25 .00 3.99# 2014………………………….. 3.25 .00 3.99# 2015………………………….. 3.25 .00 3.99# 2016…………………………...3.50 .00 2.99~ 2017…………………………...4.25 .00 3.49~ 2018…………………………...5.25 .00 4.00~ + This is a margin we have used recently. This rate reflects the 14.9% maximum rate limitation. * This reflects a minimum payment of $200.00. # This rate reflects the 3.99% minimum rate limitation. ~ This rate reflects the discounted introductory rate. YOU SHOULD CHECK WITH YOUR LEGAL ADVISOR AND WITH OTHER MORTGAGE LIEN HOLDERS AS TO WHETHER ANY PRIOR LIENS CONTAIN ACCELERATION CLAUSES WHICH WOULD BE ACTIVATED BY JUNIOR ENCUMBRANCE.

IMPORTANT INFORMATION ABOUT

WATERTOWN SAVINGS BANK'S HOME EQUITY LINE OF CREDIT

5.00% Non-Depository Customer

This Disclosure contains important information about the Home Equity Line of Credit (the "Credit Line") at Watertown Savings Bank (the "Bank"). You should read it carefully and keep a copy for your records. 1. 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 the Bank, you are entitled to a refund of any fees that you paid in connection with your application. You should submit your application within 30 days of receipt of this disclosure. 2. 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. 3. Possible Actions. We can terminate your credit account and require you to pay us the entire outstanding balance in one payment and impose fees upon termination if: (a) you engage in fraud or material misrepresentation in connection with the Credit Line, (b) you do not meet the repayment terms of the Credit Line, or (c) your action or inaction adversely affects the property for the Credit Line or our security interest in the property. We can refuse to make additional extensions of credit or reduce your credit limit if: (d) the value of the real property securing the Credit Line declines significantly below its appraised value for purposes of the Credit Line, (e) we reasonably believe that you will not be able to meet the repayment obligations due to a material change in your financial circumstances, (f) you are in default of a material obligation of the Credit Line, (g) government action prevents us from imposing the annual percentage rate provided for in your Agreement with us or impairs our security interest such that the value of the interest is less than 120% of the Credit Line, (h) a government action prevents us from imposing the annual percentage rate provided for in your Agreement with us or impairs our security interest such that the value of the interest is less than 120% of the Credit Line, (i) a government authority has notified us that continued advances would constitute an unsafe business practice, or (j) we are entitled to terminate your Credit Line and to demand immediate payment in full under the terms of your Agreement with us, but have decided to take, temporarily, the alternative of prohibiting additional advances or of reducing the maximum credit limit. We will provide you, upon your request, a list of categories of contract obligations that we consider "material obligations" as mentioned in subsection (f) above. Generally, the terms of the Credit Line may not be changed except upon the mutual written consent of the Bank and you. However, we may change the terms of your Credit Line if the change is insignificant or if it is beneficial to you. We may also prohibit you from receiving additional advances or reduce your credit limit during any period in which the maximum annual percentage rate for your Credit Line is reached. 4. The term "finance charge" is the dollar amount that the loan will cost you and is intended to be synonymous with the word interest as used in this disclosure. 5. Minimum Payment Requirements. The term of the Credit Line for which you can obtain advances of credit, the "Draw Period", is the same as the overall term of the Credit Line and will depend upon the number of billing cycles agreed upon by you and the Bank under the payment plan described below. However, in no event will the term of the Credit Line exceed twenty years. Your payments will be due monthly and will include all interest then due on the principal balance, together with a principal payment to be calculated by dividing the loan at the end of the billing cycle by the number of billing cycles in the term of your Credit Line. However, the Bank will require a minimum payment of at least $200.00 each billing cycle. If the interest and principal balance outstanding at the end of the billing cycle is less than $200.00, you must make a minimum payment of the entire outstanding balance. The amount of interest included in each payment will be all of the interest owing as of the time the billing statement is prepared. The interest is computed by applying the daily periodic rate to the average daily balance and multiplying the result times the number of days in the billing cycle. The daily periodic rate is the applicable loan interest rate (annual percentage rate) in effect for that month divided by 365. Payments are credited first to interest, second to principal, and third to credit life insurance if you have purchased such insurance, and finally to late charges. The term of your Credit line may be between five and twenty years. As a result, you will be required to repay the entire principal balance and any accrued interest then owing by the end of the Credit Line term agreed upon by you and the Bank. Under most circumstances, the minimum payments will not repay the balance that is outstanding on your Credit Line by the end of the Credit Line term agreed upon by you and the Bank. You will then be required to pay the entire balance in a single payment. THE TERM OF YOUR CREDIT LINE WILL BE DETERMINED BY YOU AND THE BANK. BECAUSE OF THE "REVOLVING" NATURE OF YOUR CREDIT LINE, IN ADDITION TO YOUR MONTHLY PAYMENTS DESCRIBED IN THIS DOCUMENT, YOU WILL BE REQUIRED TO REPAY THE ENTIRE PRINCIPAL BALANCE OWING AT THE END OF YOUR CREDIT LINE TERM PLUS ANY ACCRUED INTEREST. THE BANK HAS NO OBLIGATION TO REFINANCE THIS CREDIT LINE AT THE END OF YOUR CREDIT LINE TERM. THEREFORE, YOU MAY BE REQUIRED TO REPAY THE BALANCE OF YOUR CREDIT LINE OUT OF ASSETS YOU OWN OR YOU MAY HAVE TO FIND ANOTHER LENDER WILLING TO REFINANCE THAT BALANCE. ASSUMING THIS BANK OR ANOTHER LENDER REFINANCES THE BALANCE AT MATURITY, YOU WILL PROBABLY BE CHARGED INTEREST AT MARKET RATES PREVAILING AT THAT TIME AND SUCH RATES MAY BE HIGHER THAN THE INTEREST RATE ON THIS CREDIT LINE. YOU MAY ALSO HAVE TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW CREDIT LINE MORTGAGE.

SEE REVERSE SIDE FOR ADDITIONAL DISCLOSURES _______________________________________________________ _______________________________________________________ Signature Date Signature Date

6. Minimum Payment Example. If you took a single $10,000.00 advance on the first day of your Credit Line, assuming that you did not purchase credit life insurance and assuming a fifteen year loan term and a ANNUAL PERCENTAGE RATE of 5.00% as the discounted introductory interest rate for the first thirty-six billing cycles, and then an ANNUAL PERCENTAGE RATE OF 5.25% “reflecting the minimum rate limitation” it would take four years and eight months (57 billing cycles) to pay off the advance if you made only the minimum monthly payments. During that period, you would make 56 minimum payments of $200.00 and a final payment of $47.04. 7. Fees and Charges. To open and maintain a line of credit, you must pay certain fees to third parties. These fees generally range from $615.00 to $2,500.00, depending upon the amount of your credit limit and the location of the property securing your Credit Line. In addition, we require that you obtain property insurance on the property securing your Credit Line. The cost of title insurance and the amount of the mortgage recording tax shall be based on the maximum credit limit whether or not that amount is advanced. Upon request, we will provide you with a more detailed itemization of the fees you will have to pay third parties. Late Charges. If a payment is late (more than 15 days after due) you will be charged 2% of the amount of the payment that is due. 8. Minimum Draw Requirement and Credit Limit. The minimum credit advance that you can receive is $500.00. The minimum credit limit available is $15,000.00. 9. Tax Deductibility. You should consult a tax advisor regarding the deductibility of interest and charges for the Credit Line. 10. Variable Rate Feature. The Credit Line has a variable rate feature, and the annual percentage rate (corresponding to the periodic rate) and the minimum monthly payment can change as a result. The initial percentage rate is discounted to 4.50% until the thirty-seventh billing cycle and includes only interest and no other costs. Negative amortization does not apply to this loan. Your initial percentage rate will be fixed for the first thirty-six complete billing cycles and will be based on market conditions at the time of closing. Beginning with the thirty-seventh billing cycle, the annual percentage rate will be based on the value of an index or the minimum floor rate. The index is the "Prime Rate" as published in the Wall Street Journal. When more than one Prime Rate may be published in any edition, the index will be the highest of the Prime Rates set forth. To determine the annual percentage rate that will apply to your Credit Line, we add a margin to the value of the index on the last Bank business day prior to the start of the billing cycle. Ask us for the current index value, margin, initial rate premium or discount, and annual percentage rate. After you open a Credit Line, rate information will be provided on periodic statements that we send you. 11. Rate Changes. The annual percentage rate will be fixed for the first thirty-six complete billing cycles. Beginning with the thirty-seventh billing cycle, the annual percentage rate may change each billing cycle. Billing cycles run approximately from the third Saturday of one month to the third Saturday of the next month. The minimum ANNUAL PERCENTAGE RATE that can apply after the thirty-sixth billing cycle and during the remaining term of the Credit Line is 5.00% and the maximum ANNUAL PERCENTAGE RATE that can apply during the term of the Credit Line is 14.90%. Apart from this rate “floor” and rate “cap” there is no limit on the amount by which the rate can change during any one-monthly period beginning with the thirty-seventh billing cycle. The minimum rate or the maximum rate can be reached in the thirty-seventh billing cycle of your Credit Line. 12. Minimum Rate and Maximum Rate and Payment Example. If you had an outstanding balance of $10,000.00 at the beginning of your loan term, assuming a fifteen year loan term, the minimum monthly payment at the minimum ANNUAL PERCENTAGE RATE of 5.00% and at the maximum ANNUAL PERCENTAGE RATE OF 14.90% would be $200.00. This amount reflects the operation of the minimum payment amount of $200.00. Any amounts included in the minimum payment amount which are in excess of accrued interest, principal and credit life insurance premiums, if purchased, for the current month will be credited directly to principal. 13. Historical Example. The following table shows how the annual percentage rate and the minimum monthly payments for a single $10,000.00 cash advance would have changed based on changes in the index over the past fifteen years. The index values for the Prime Rate are from January of each year. While only one payment amount per year is shown, payments would have varied during each year. 14. No closing cost option. If you select the no closing cost option and this loan is terminated for any reason within three (3) years of the date of loan closing, borrowers agree to reimburse Lender for the total cost of these fees which were paid by Lender in connection with this loan. These fees will be payable, in full, upon demand by the Lender. The table assumes that (a) no additional credit advances were taken, (b) you did not purchase credit life or disability insurance, (c) only the minimum monthly payment was made, and (d) the annual percentage rate remained constant during each year. It does not necessarily indicate how the index or your payments would change in the future. YEAR INDEX (%) MARGIN+ APR PAYMENT 2003…………………………. 4.25 .00 3.99 200.00(*) 2004…………………………. 4.00 .00 3.99 2005………………………….. 5.75 .00 5.75 2006………………………….. 7.25 .00 7.25 2007………………………….. 8.25 .00 8.25 2008…………………………...7.25 .00 7.25 2009………………………….. 3.25 .00 3.99# 2010………………………….. 3.25 .00 3.99# 2011…………………………...3.25 .00 3.99# 2012…………………………. .3.25 .00 3.99# 2013………………………….. 3.25 .00 3.99# 2014………………………….. 3.25 .00 3.99# 2015………………………….. 3.25 .00 3.99# 2016…………………………...3.50 .00 3.50# 2017…………………………...4.25 .00 3.99~ 2018…………………………...5.25 .50 5.00~ + This is a margin we have used recently. This rate reflects the 14.9% maximum rate limitation. * This reflects a minimum payment of $200.00. # This rate reflects the 3.99% minimum rate limitation. ~ This rate reflects the discounted introductory rate. YOU SHOULD CHECK WITH YOUR LEGAL ADVISOR AND WITH OTHER MORTGAGE LIEN HOLDERS AS TO WHETHER ANY PRIOR LIENS CONTAIN ACCELERATION CLAUSES WHICH WOULD BE ACTIVATED BY JUNIOR ENCUMBRANCE.

WATERTOWN SAVINGS BANK 111 Clinton Street – Watertown, NY 13601

INSURANCE DISCLOSURE (For Credit Application)

These disclosures are required by law because you are applying for credit from a bank:

• 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 the annuities and life insurance, including

the possible loss of value. By signing below, you acknowledge that the foregoing 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. ____________________ __________________________________________ Date Signature ____________________ __________________________________________ Date Signature

BORROWER'S SIGNATURE AUTHORIZATION

Borrower(s) Name and Address Lender Name and Address Watertown Savings Bank 111 Clinton Street Watertown, NY 13601

Subject Property Address Lender Contact Shelby L. Morgia Loan Officer MLO# 552288 Lender Phone No. (315) 788-7100 1-800-870-8510

Loan Number Date

Borrower Authorization

I hereby authorize the Lender to verify my past and present employment earnings records, bank accounts, stock holdings and any other asset balances that are needed to process my mortgage loan application. I further authorize the Lender to order a consumer credit report and verify other credit information, including past and present mortgage and landlord references. It is understood that a copy of this form will also serve as authorization. The information the Lender obtains is only to be used in the processing of my application for a mortgage loan. ________________________________________________________ ______________________ Borrower Date ________________________________________________________ ______________________ Co-Borrower Date

The Borrower and/or Co-Borrower have applied for a HUD/FHA loan. The following "NOTICE TO BORROWERS" is required for HUD/FHA loan applications using the blanket authorization form.

NOTICE TO BORROWERS: This is notice to you as required by the Right to Financial Privacy Act of 1978 that HUD/FHA has a right of access to financial records held by financial institutions in connection with the consideration or administration of assistance to you. Financial records involving your transaction will be available to HUD/FHA without further notice or authorization but will not be disclosed or released by this institution to another Government Agency or Department without your consent except as required or permitted by law.

Bankers Systems, Inc., St. Cloud, MN (1-800-397-2341) Form FNMA-BSA 8/14/92 (page 1 of 1)

NOTICE OF RIGHT TO COPY OF APPRAISAL (ECOA)

BORROWER(S): DATE:

PROPERTY ADDRESS: LOAN NUMBER:

LENDER/BROKER: LOAN ORIGINATOR: This notice is being provided to you pursuant to 12 CFR § 1002.14(a). We may order an appraisal to determine the property’s value and charge you for this appraisal. We will promptly give you a copy of any appraisal, even if your loan does not close. You can pay for an additional appraisal for your own use at your own cost. You will be provided a copy of each appraisal or written valuation concerning this property promptly upon completion, or three (3) business days prior to the time you become contractually obligated on the transaction (for closed-end credit) or account opening (for open-end credit), whichever is earlier. Initial the applicable statement: I/We wish to receive a copy of each appraisal report or written valuation according to the timing requirement described above. I/We wish to waive the timing requirement described above and, instead, agree to receive any copy at or before the time I/we become Contractually obligated on the transaction (for closed-end credit) or account opening (for open-end credit), except where otherwise prohibited by law. By signing below, you hereby acknowledge reading and understanding all of the information disclosed above and receiving a copy of this notice on the date indicated below. Borrower Date Borrower Date APPRAISAL-ECOA 1/2014 ~ WORD DOCUMENT

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PRE-APPLICATION DISCLOSURE AND FEE AGREEMENT FOR USE BY LICENSED MORTGAGE BANKERS AND

EXEMPT ORGANIZATIONS Pursuant to New York Comp. Codes R.& Regs.tit.3, §38.3(b)(1)

Company Name: Watertown Savings Bank Address: 111 Clinton St. Watertown, NY 13601 Telephone: 315-788-7100 Fax: 315-836-8415

-------------------------------------------------------------------------------------------- In the following disclosure, I = applicant; you = lender

I understand that I am required to pay the following fees at application:

• Application fee $0.00 • Property appraisal fee* $350.00 • Credit report fee* $18.00

*The property appraisal fee and the credit report fee are estimates of the actual cost of the services. Should the actual costs exceed the estimate, I understand that I will be billed and will pay the shortfall at or prior to closing.

• the application fee is refundable if ________________________________________________________________ _______________________________________________________________________________

• the credit report and appraisal fees are non-refundable except that amounts collected in excess of the actual cost will

be refunded. If the credit report and appraisal have not been done, the fees will be refunded in full. PROCESSING FEE: Processing Fee $0.00 PREPAYMENT PENALTIES: I understand that certain mortgage products impose a prepayment penalty on the borrower. You will disclose the amount of, or the formula for calculating, the prepayment penalty, if any, and the terms of the prepayment penalty, if any, as soon as you know them. APPLICATION QUESTIONS: I understand that I may address questions or comments about my application to Watertown Savings Bank at 315-788-7100. If I live more than 50 miles from the office at which my file is being processed, I may call you at 1-800-870-8510, or if unavailable, I may call you collect or send you electronic mail at [email protected].

INITIALS: ________

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ASSIGNMENT OF COMMITMENT: I understand that you routinely assign the commitments you have issued in your own name to a third party or parties. The amount of any fee you will _____Pay To_____ Receive From the third party or parties is $__________________________. The name and address of the third party or parties and an identification of the services to be performed are as follows: Not-Applicable DISCOUNT POINTS: The loan product for which you applied may include discount points. Discount points should lower the interest rate paid on the loan but may not lower the overall cost of the loan. If you refinance or pay off your loan quickly, you will lose the benefit of any lower interest rate provided by the discount points. Furthermore, if you finance the discount points, this will increase the amount of money that you must repay to the lender and you will have to pay interest on the discount points as part of the amount you have borrowed. By signing below, I acknowledge receipt of a copy of this pre-application disclosure and fee agreement. **Applicant____________________________________________ Date: _________________________________

Signature **Applicant____________________________________________ Date: __________________________________ Signature **Interviewer____________________________________________ Date: __________________________________ Signature **Interviewer Name & Title_________________________________________________________________________________ ** Do not sign this form if spaces are left blank 5/2018 INITIALS: ________

Bo

Interest Rate Disclosure

Borrower Name(s):

Lender: Watertown Savings Bank

NMLS #: 519199

Date:

Loan Number:Property Address:

This disclosure is provided to you pursuant to N.Y. Banking Law 9-0; NYCRR & Regs. tit. 3,§ 3.3(d).

You have recently applied for a mortgage loan with Watertown Savings Bank.

The time at which the interest rate will be set is as follows:

___The interest rate at the time of application.

_X__The interest rate at the time of commitment.

___The interest rate will be set within N/A calendar days prior to the scheduled close of the loan.

___You may choose the time at which the interest rate will be set. Contact our office during normal business hours to request a rate lock.

ACKNOWLEDGEMENT

By signing below, you hereby acknowledge reading and understanding all of the information, disclosed above, and receiving a copy of this disclosure on the date indicated below.

______________________________________ ______________________________________

Borrower Date Borrower Date

Rev 3/2016

Loan Originator:

NMLS#: License #

WSB HEL FS: 5/28/96 Revised 5/9/18

WATERTOWN SAVINGS BANK

HOME EQUITY LINE OF CREDIT

ESTIMATE OF NO CLOSING COST FEE SCHEDULE

The fees shown below will be paid by the Lender at the time of closing. If, however, my loan is terminated for any reason by me or the Lender, within three (3) years from the date of this loan, I agree to reimburse the Lender for the total cost of fees incurred, as shown below, which were paid by the Lender in connection with the loan. These fees will be payable, in full, upon demand by the Lender. At the option of the Lender, these fees may be added to the balance and I will be assessed finance charges on the amounts added to the balance for payment of these fees. Mortgage Tax: $____________________ Recording Fees: $ 95.00 Abstracting Fee: $____________________ Flood Hazard Determination: $ 15.00 Appraisal Fee: $ 350.00 Credit Report Fee: $ Other Recording Fees, if applicable: $ Other Fees: : $ Total: $____________________ MORTGAGE DISCHARGE FEE: $55.50 - This fee is an estimate of the fee that will be due when the Agreement has been terminated and the Bank has been paid all amounts due under the Agreement and the Mortgage. The fee covers the cost of discharging the Mortgage. Loan Officer Copy Received: ________________________________________ Borrower ________________________________________ Co-Borrower

January 2014

What you should know about home equity lines of credit

2 WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT

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-a-

home to access interactive tools and resources for mortgage shoppers, which are expected to be

available beginning in 2014.

http://www.consumerfinance.gov/owning-a-home/


Table of contents Table of contents......................................................................................................... 3

1. Introduction ........................................................................................................... 4

1.1 Home equity plan checklist ...................................................................... 4

2. What is a home equity line of credit? ................................................................. 6

2.1 What should you look for when shopping for a plan? ............................. 7

2.2 Costs of establishing and maintaining a home equity line ...................... 8

2.3 How will you repay your home equity plan? ............................................ 9

2.4 Line of credit vs. traditional second mortgage loans ............................. 10

2.5 What if the lender freezes or reduces your line of credit? ...................... 11

Appendix A: ............................................................................................................... 12

Defined terms .................................................................................................. 12

Appendix B: ............................................................................................................... 15

More information .............................................................................................15

Appendix C: ............................................................................................................... 16

Contact information ........................................................................................ 16


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


Basic features for comparison (continued) Plan A Plan B

Repayment period

Initial fees

Appraisal fee

Application fee

Up-front charges, including points

Closing costs

Repayment terms

During the draw period

Interest and principal payments

Interest-only payments

Fully amortizing payments

When the draw period ends

Balloon payment?

Renewal available?

Refinancing of balance by lender?


2. What is a home equity line of credit?

A home equity line of credit is a form of revolving credit in which your home serves as collateral.

Because a home often is a consumer’s most valuable asset, many homeowners use home equity

credit lines only for major items, such as education, home improvements, or medical bills, and

choose not to use them for day-to-day expenses.

With a home equity line, you will be approved for a specific amount of credit. Many lenders set

the credit limit on a home equity line by taking a percentage (say, 75 percent) of the home’s

appraised value and subtracting from that the balance owed on the existing mortgage. For

example:

In determining your actual credit limit, the lender will also consider your ability to repay the

loan (principal and interest) by looking at your income, debts, and other financial obligations as

well as your credit history.

Many home equity plans set a fixed period during which you can borrow money, such as 10

years. At the end of this “draw period,” you may be allowed to renew the credit line. If your plan

Appraised value of home $100,000

Percentage x 75%

Percentage of appraised value = $75,000

Less balance owed on mortgage – $40,000

Potential line of credit $35,000


does not allow renewals, you will not be able to borrow additional money once the period has

ended. Some plans may call for payment in full of any outstanding balance at the end of the

period. Others may allow repayment over a fixed period (the “repayment period”), for example,

10 years.

Once approved for a home equity line of credit, you will most likely be able to borrow up to your

credit limit whenever you want. Typically, you will use special checks to draw on your line.

Under some plans, borrowers can use a credit card or other means to draw on the line.

There may be other limitations on how you use the line. Some plans may require you to borrow

a minimum amount each time you draw on the line (for example, $300) or keep a minimum

amount outstanding. Some plans may also require that you take an initial advance when the line

is set up.

2.1 What should you look for when shopping for a plan?

If you decide to apply for a home equity line of credit, look for the plan that best meets your

particular needs. Read the credit agreement carefully, and examine the terms and conditions of

various plans, including the annual percentage rate (APR) and the costs of establishing the plan.

Remember, though, that the APR for a home equity line is based on the interest rate alone and

will not reflect closing costs and other fees and charges, so you’ll need to compare these costs, as

well as the APRs, among lenders.

2.1.1 Variable interest rates

Home equity lines of credit typically involve variable rather than fixed interest rates. The

variable rate must be based on a publicly available index (such as the prime rate published in

some major daily newspapers or a U.S. Treasury bill rate). In such cases, the interest rate you pay

for the line of credit will change, mirroring changes in the value of the index. Most lenders cite

the interest rate you will pay as the value of the index at a particular time, plus a “margin,” such

as 2 percentage points. Because the cost of borrowing is tied directly to the value of the index, it

is important to find out which index is used, how often the value of the index changes, and how

high it has risen in the past. It is also important to note the amount of the margin.


Lenders sometimes offer a temporarily discounted interest rate for home equity lines—an

“introductory” rate that is unusually low for a short period, such as six months.

Variable-rate plans secured by a dwelling must, by law, have a ceiling (or cap) on how much your

interest rate may increase over the life of the plan. Some variable-rate plans limit how much your

payment may increase and how low your interest rate may fall if the index drops.

Some lenders allow you to convert from a variable interest rate to a fixed rate during the life of

the plan, or let you convert all or a portion of your line to a fixed-term installment loan.

2.2 Costs of establishing and maintaining a home equity line

Many of the costs of setting up a home equity line of credit are similar to those you pay when

you get a mortgage. For example:

A fee for a property appraisal to estimate the value of your home;

An application fee, which may not be refunded if you are turned down for credit;

Up-front charges, such as one or more “points” (one point equals 1 percent of the credit

limit); and

Closing costs, including fees for attorneys, title search, mortgage preparation and filing,

property and title insurance, and taxes.

In addition, you may be subject to certain fees during the plan period, such as annual

membership or maintenance fees and a transaction fee every time you draw on the credit line.

You could find yourself paying hundreds of dollars to establish the plan. And if you were to draw

only a small amount against your credit line, those initial charges would substantially increase

the cost of the funds borrowed. On the other hand, because the lender’s risk is lower than for

other forms of credit, as your home serves as collateral, annual percentage rates for home equity

lines are generally lower than rates for other types of credit. The interest you save could offset

the costs of establishing and maintaining the line. Moreover, some lenders waive some or all of

the closing costs.


2.3 How will you repay your home equity plan?

Before entering into a plan, consider how you will pay back the money you borrow. Some plans

set a minimum monthly payment that includes a portion of the principal (the amount you

borrow) plus accrued interest. But, unlike with typical installment loan agreements, the portion

of your payment that goes toward principal may not be enough to repay the principal by the end

of the term. Other plans may allow payment of only the interest during the life of the plan, which

means that you pay nothing toward the principal. If you borrow $10,000, you will owe that

amount when the payment plan ends.

Regardless of the minimum required payment on your home equity line, you may choose to pay

more, and many lenders offer a choice of payment options. However, some lenders may require

you to pay special fees or penalties if you choose to pay more, so check with your lender. Many

consumers choose to pay down the principal regularly as they do with other loans. For example,

if you use your line to buy a boat, you may want to pay it off as you would a typical boat loan.

Whatever your payment arrangements during the life of the plan—whether you pay some, a

little, or none of the principal amount of the loan—when the plan ends, you may have to pay the

entire balance owed, all at once. You must be prepared to make this “balloon payment” by

refinancing it with the lender, by obtaining a loan from another lender, or by some other means.

If you are unable to make the balloon payment, you could lose your home.

If your plan has a variable interest rate, your monthly payments may change. Assume, for

example, that you borrow $10,000 under a plan that calls for interest-only payments. At a 10

percent interest rate, your monthly payments would be $83. If the rate rises over time to 15

percent, your monthly payments will increase to $125. Similarly, if you are making payments

that cover interest plus some portion of the principal, your monthly payments may increase,

unless your agreement calls for keeping payments the same throughout the plan period.

If you sell your home, you will probably be required to pay off your home equity line in full

immediately. If you are likely to sell your home in the near future, consider whether it makes

sense to pay the up-front costs of setting up a line of credit. Also keep in mind that renting your

home may be prohibited under the terms of your agreement.


2.4 Line of credit vs. traditional second mortgage loans

If you are thinking about a home equity line of credit, you might also want to consider a

traditional second mortgage loan. This type of loan provides you with a fixed amount of money,

repayable over a fixed period. In most cases, the payment schedule calls for equal payments that

pay off the entire loan within the loan period. You might consider a second mortgage instead of a

home equity line if, for example, you need a set amount for a specific purpose, such as an

addition to your home.

In deciding which type of loan best suits your needs, consider the costs under the two

alternatives. Look at both the APR and other charges. Do not, however, simply compare the

APRs, because the APRs on the two types of loans are figured differently:

The APR for a traditional second mortgage loan takes into account the interest rate

charged plus points and other finance charges.

The APR for a home equity line of credit is based on the periodic interest rate alone. It

does not include points or other charges.

2.4.1 Disclosures from lenders

The federal Truth in Lending Act requires lenders to disclose the important terms and costs of

their home equity plans, including the APR, miscellaneous charges, the payment terms, and

information about any variable-rate feature. And in general, neither the lender nor anyone else

may charge a fee until after you have received this information. You usually get these disclosures

when you receive an application form, and you will get additional disclosures before the plan is

opened. If any term (other than a variable-rate feature) changes before the plan is opened, the

lender must return all fees if you decide not to enter into the plan because of the change.

Lenders are also required to provide you with a list of homeownership counseling organizations

in your area.

When you open a home equity line, the transaction puts your home at risk. If the home involved

is your principal dwelling, the Truth in Lending Act gives you three days from the day the

account was opened to cancel the credit line. This right allows you to change your mind for any

reason. You simply inform the lender in writing within the three-day period. The lender must


then cancel its security interest in your home and return all fees— including any application and

appraisal fees—paid to open the account.

The Home Ownership and Equity Protection Act of 1994 (HOEPA) addresses certain unfair

practices and establishes requirements for certain loans with high rates and fees, including

certain additional disclosures. HOEPA now covers some HELOCs. You can find out more

information by contacting the CFPB at the website address and phone number listed in the

Contact information appendix, below.

2.5 What if the lender freezes or reduces your line of credit?

Plans generally permit lenders to freeze or reduce a credit line if the value of the home “declines

significantly” or when the lender “reasonably believes” that you will be unable to make your

payments due to a “material change” in your financial circumstances. If this happens, you may

want to:

Talk with your lender. Find out what caused the lender to freeze or reduce your credit

line and what, if anything, you can do to restore it. You may be able to provide additional

information to restore your line of credit, such as documentation showing that your

house has retained its value or that there has not been a “material change” in your

financial circumstances. You may want to get copies of your credit reports (go to the

CFPB’s website at consumerfinance.gov/askcfpb/5/can-i-review-my-credit-report.html

for information about how to get free copies of your credit reports) to make sure all the

information in them is correct. If your lender suggests getting a new appraisal, be sure

you discuss appraisal firms in advance so that you know they will accept the new

appraisal as valid.

Shop around for another line of credit. If your lender does not want to restore

your line of credit, shop around to see what other lenders have to offer. If another lender

is willing to offer you a line of credit, you may be able to pay off your original line of

credit and take out another one. Keep in mind, however, that you may need to pay some

of the same application fees you paid for your original line of credit.

http://www.consumerfinance.gov/askcfpb/5/can-i-review-my-credit-report.html


APPENDIX A:

Defined terms This glossary provides general definitions for terms commonly used in the real estate market.

They may have different legal meanings depending on the context.

DEFINED TERM

ANNUAL

MEMBERSHIP OR

MAINTENANCE FEE

An annual charge for access to a financial product such as a line of credit, credit card, or account. The fee is charged regardless of whether or not the product is used.

ANNUAL

PERCENTAGE RATE

(APR)

The cost of credit, expressed as a yearly rate. For closed-end credit, such as car loans or mortgages, the APR includes the interest rate, points, broker fees, and other credit charges that the borrower is required to pay. An APR, or an equivalent rate, is not used in leasing agreements.

APPLICATION FEE Fees charged when you apply for a loan or other credit. These fees may include charges for property appraisal and a credit report.

BALLOON PAYMENT A large extra payment that may be charged at the end of a mortgage loan or lease.

CAP (INTEREST

RATE)

A limit on the amount that your interest rate can increase. Two types of interest-rate caps exist. Periodic adjustment caps limit the interest-rate increase from one adjustment period to the next. Lifetime caps limit the interest-rate increase over the life of the loan. By law, all adjustable-rate mortgages have an overall cap.


CLOSING OR

SETTLEMENT COSTS

Fees paid when you close (or settle) on a loan. These fees may include application fees; title examination, abstract of title, title insurance, and property survey fees; fees for preparing deeds, mortgages, and settlement documents; attorneys’ fees; recording fees; estimated costs of taxes and insurance; and notary, appraisal, and credit report fees. Under the Real Estate Settlement Procedures Act, the borrower receives a good faith estimate of closing costs within three days of application. The good faith estimate lists each expected cost as an amount or a range.

CREDIT LIMIT The maximum amount that may be borrowed on a credit card or under a home equity line of credit plan.

EQUITY

The difference between the fair market value of the home and the outstanding balance on your mortgage plus any outstanding home equity loans.

INDEX

The economic indicator used to calculate interest-rate adjustments for adjustable-rate mortgages or other adjustable-rate loans. The index rate can increase or decrease at any time. See also Selected index rates for ARMs over an 11-year period (consumerfinance.gov/f/201204_CFPB_ARMs-brochure.pdf) for examples of common indexes that have changed in the past.

INTEREST RATE

The percentage rate used to determine the cost of borrowing money, stated usually as a percentage of the principal loan amount and as an annual rate.

MARGIN The number of percentage points the lender adds to the index rate to calculate the adjustable-rate-mortgage interest rate at each adjustment.

MINIMUM PAYMENT

The lowest amount that you must pay (usually monthly) to keep your account in good standing. Under some plans, the minimum payment may cover interest only; under others, it may include both principal and interest.

http://files.consumerfinance.gov/f/201204_CFPB_ARMs-brochure.pdf


POINTS (ALSO

CALLED DISCOUNT

POINTS)

One point is equal to 1 percent of the principal amount of a mortgage loan. For example, if a mortgage is $200,000, one point equals $2,000. Lenders frequently charge points in both fixed-rate and adjustable-rate mortgages to cover loan origination costs or to provide additional compensation to the lender or broker. These points usually are paid at closing and may be paid by the borrower or the home seller, or may be split between them. In some cases, the money needed to pay points can be borrowed (incorporated in the loan amount), but doing so will increase the loan amount and the total costs. Discount points (also called discount fees) are points that you voluntarily choose to pay in return for a lower interest rate.

SECURITY INTEREST

If stated in your credit agreement, a creditor, lessor, or assignee’s legal

right to your property (such as your home, stocks, or bonds) that secures payment of your obligation under the credit agreement. The property that secures payment of your obligation is referred to as “collateral.”

TRANSACTION FEE

Fee charged each time a withdrawal or other specified transaction is made on a line of credit, such as a balance transfer fee or a cash advance fee.

VARIABLE RATE An interest rate that changes periodically in relation to an index, such as the prime rate. Payments may increase or decrease accordingly.


APPENDIX B:

More information For more information about mortgages, including home equity lines of credit, visit

consumerfinance.gov/mortgage. For answers to questions about mortgages and other financial

topics, visit consumerfinance.gov/askcfpb. You may also visit the CFPB’s website at

consumerfinance.gov/owning-a-home to access interactive tools and resources for mortgage

shoppers, which are expected to be available beginning in 2014.

Housing counselors can be very helpful, especially for first-time home buyers or if you’re having

trouble paying your mortgage. The U.S. Department of Housing and Urban Development (HUD)

supports housing counseling agencies throughout the country that can provide free or low-cost

advice. You can search for HUD-approved housing counseling agencies in your area on the

CFPB’s web site at consumerfinance.gov/find-a-housing-counselor or by calling HUD’s

interactive toll-free number at 800-569-4287.

The company that collects your mortgage payments is your loan servicer. This may not be the

same company as your lender. If you have concerns about how your loan is being serviced or

another aspect of your mortgage, you may wish to submit a complaint to the CFPB at

consumerfinance.gov/complaint or by calling (855) 411-CFPB (2372).

When you submit a complaint to the CFPB, the CFPB will forward your complaint to the

company and work to get a response. Companies have 15 days to respond to you and the

CFPB. You can review the company’s response and give feedback to the CFPB.

http://www.consumerfinance.gov/mortgage/

http://www.consumerfinance.gov/askcfpb/

http://www.consumerfinance.gov/owning-a-home

http://www.consumerfinance.gov/find-a-housing-counselor

http://www.consumerfinance.gov/complaint


APPENDIX C:

Contact information For additional information or to submit a complaint, you can contact the CFPB or one of the

other federal agencies listed below, depending on the type of institution. If you are not sure

which agency to contact, you can submit a complaint to the CFPB and if the CFPB determines

that another agency would be better able to assist you, the CFPB will refer your complaint to

that agency and let you know.

Regulatory agency Regulated entities Contact information

Consumer Financial

Protection Bureau (CFPB) P.O. Box 4503 Iowa City, IA 52244

Insured depository institutions and credit unions with assets greater than $10 billion (and their affiliates), and non-bank providers of consumer financial products and services, including mortgages, credit cards, debt collection, consumer reports, prepaid cards, private education loans, and payday lending

(855) 411-CFPB (2372) consumerfinance.gov consumerfinance.gov/ complaint

Board of Governors of the

Federal Reserve System

(FRB) Consumer Help P.O. Box 1200

Minneapolis, MN 55480

Federally insured state-chartered bank members of the Federal Reserve System

(888) 851-1920 federalreserveconsumerhelp.gov

http://www.consumerfinance.gov/



http://www.federalreserveconsumerhelp.gov/

http://www.federalreserveconsumerhelp.gov/



Office of the Comptroller

of the Currency (OCC) Customer Assistance Group 1301 McKinney Street Suite 3450 Houston, TX 77010

National banks and federally chartered savings banks/associations

(800) 613-6743 occ.treas.gov helpwithmybank.gov

Federal Deposit Insurance

Corporation (FDIC) Consumer Response Center 1100 Walnut Street, Box #11 Kansas City, MO 64106

Federally insured state-chartered banks that are not members of the Federal Reserve System

(877) ASK-FDIC or (877) 275-3342 fdic.gov fdic.gov/consumers

Federal Housing Finance

Agency (FHFA) Consumer Communications Constitution Center 400 7th Street, S.W. Washington, DC 20024

Fannie Mae, Freddie Mac, and the Federal Home Loan Banks

Consumer Helpline (202) 649-3811 fhfa.gov fhfa.gov/Default.aspx?Page=369 [email protected]

National Credit Union

Administration (NCUA) Consumer Assistance 1775 Duke Street Alexandria, VA 22314

Federally chartered credit unions (800) 755-1030 ncua.gov mycreditunion.gov

Federal Trade

Commission (FTC) Consumer Response Center 600 Pennsylvania Ave, N.W. Washington, DC 20580

Finance companies, retail stores, auto dealers, mortgage companies and other lenders, and credit bureaus

(877) FTC-HELP or (877) 382-4357 ftc.gov ftc.gov/bcp

http://www.occ.treas.gov/

http://www.occ.treas.gov/

http://www.helpwithmybank.gov/

http://www.fdic.gov/

http://www.fdic.gov/consumers

http://www.fhfa.gov/

http://www.fhfa.gov/

http://www.fhfa.gov/Default.aspx?Page=369

http://www.fhfa.gov/Default.aspx?Page=369

mailto:[email protected]

http://www.ncua.gov/

http://www.mycreditunion.gov/

http://www.ftc.gov/

http://www.ftc.gov/



Securities and Exchange

Commission (SEC) Complaint Center 100 F Street, N.E. Washington, DC 20549

Brokerage firms, mutual fund companies, and investment advisers

(202) 551-6551 sec.gov sec.gov/complaint/select.shtml

Farm Credit

Administration Office of

Congressional and Public

Affairs

1501 Farm Credit Drive McLean, VA 22102

Agricultural lenders (703) 883-4056 fca.gov

Small Business

Administration (SBA) Consumer Affairs 409 3rd Street, S.W. Washington, DC 20416

Small business lenders (800) U-ASK-SBA or (800) 827-5722 sba.gov

Commodity Futures

Trading Commission (CFTC) 1155 21st Street, N.W. Washington, DC 20581

Commodity brokers, commodity trading advisers, commodity pools, and introducing brokers

(866) 366-2382 cftc.gov/ConsumerProtection/index.htm

http://www.sec.gov/

http://www.sec.gov/complaint/select.shtml

http://www.fca.gov/

http://www.sba.gov/

http://www.cftc.gov/ConsumerProtection/index.htm

http://www.cftc.gov/ConsumerProtection/index.htm



U.S. Department of

Justice (DOJ) Civil Rights Division 950 Pennsylvania Ave, N.W. Housing and Civil Enforcement Section Washington DC 20530

Fair lending and housing issues

(202) 514-4713 TTY–(202) 305-1882 FAX–(202) 514-1116 To report an incident of housing discrimination: 1-800-896-7743 [email protected]

Department of Housing

and Urban Development (HUD) Office of Fair Housing/Equal Opportunity 451 7th Street, S.W. Washington, DC 20410

Fair lending and housing issues (800) 669-9777 hud.gov/complaints

mailto:[email protected]

http://www.hud.gov/complaints

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