Important Terms of our Home Equity Line of Credit

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

Availability of Terms

All terms described below are subject o change. If these terms change (other than 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 fee that you have paid to us or anyone else in connection with your application.

Security Interest

 We will take a mortgage on your home. You could lose your home if you do not meet the obligations in your agreement with us.

Possible Actions

Under certain circumstances, we can (1) terminate your line and require you to pay the entire outstanding balance in one payment; (2) refuse to make additional extensions of credit and (3) reduce your line of credit limit.  If you ask, we will give you more specific information concerning when we take these actions.

Minimum Payment Requirements

You can obtain advances for 10 years (“the draw period”). During the draw period, payments will be due monthly. Your minimum monthly payment will be all unpaid finance charges that have accrued on the outstanding balance.

After the draw period ends, you will no longer be able to obtain advances and must pay the outstanding balance over 10 years (the “repayment period”). During the repayment period, payments will be due monthly. Your minimum monthly payment will equal 1/120th of the balance that was outstanding at end of the draw period, plus the finance charges that have accrued on the outstanding balance.

Minimum Payment Example

 If you made only the minimum monthly payments and took no other credit advances, it would take 20 years to pay off a credit advance of $10,000 at an Annual Percentage Rate of 4.00%

At an Annual Percentage Rate of 4.00% you would make 120 payments of $33.33 (draw period) followed by 120 monthly payments varying between $116.66 and $83.61 (repayment period)

Fees and Charges

To open and maintain a line of credit, you must pay the following fees to us:

Application fee:                                      $0.00

Points (% of credit line)                        $0.00

Discharge Fee (if required)                   $75.00**

Recording Fee                                        $175.00**

Inactivity Fee                                          $25.00       This fee will be imposed each year on the anniversary date of the note if the credit line has had no outstanding balance during the preceding 12 months.

**    If you obtain this Equity Line of Credit in conjunction with a Lowell Five First Mortgage Loan, these fees will be paid  by the Bank.

Minimum Requirements

The minimum credit advance you can receive is $500.00

Tax Deductibility

You should consult a tax advisor regarding the deductibility of interest charges for the line.

Variable Information

The line has a variable rate feature, and the annual percentage rate (corresponding to the periodic rate) and the minimum payment can change as a result.  The annual percentage rate includes only interest and no other costs. The annual percentage rate is based on the value of an index. The index is the Prime Rate as published by the wall Street Journal in its Money Rates section on the last day of each calendar month, or previous business day in case of holidays and weekends. If the journal publishes more than one prime rate, we will use the higher rate. To determine the annual percentage rate, we add the appropriate margin to the value of the index. Ask us for the current index value, margin and annual percentage rate.

_______ If checked, the initial Annual Percentage Rate is not based on the index and margin to make later interest adjustments. The initial discounted rate will be in effect for the first twelve months of this plan.

Rate Changes

The Annual Percentage Rate can change each month. The maximum Annual Percentage Rate   that can apply is 18%. Except for this 18% “cap”, there is no limit by which the rate may change during any one-year period.  The Minimum Annual Percentage Rate that can apply is 3%

Maximum Rate Adjustment and Payment Examples

If you had an outstanding loan balance of $10,000 during the draw period, the minimum payment at the maximum Annual Percentage Rate of 18% would be $150.00. This Annual Percentage Rate could be reached during the first month of the draw period.

If you had an outstanding loan balance of $10,000 during the draw period, the minimum payment at the maximum Annual Percentage Rate   of 18% would be $233.33. This Annual Percentage Rate could be reached during the first month of the repayment period.

Historical Example

The following tables show how the Annual Percentage  Rate and minimum monthly payments for a single $10,000 credit advance would have changed based on changes in the index over the past 15 years. The index values are form the 30th day in November of each year.  While only one payment amount per year is shown, payments would have varied during the year.

The table assumes that no additional credit advances were taken, that only minimum payments were made each month, and that the rate remained constant during each year. It does not necessarily indicate how the index of your payments will change in the future.

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

Click the following link for an important message from the Federal Reserve Board:

http://www.federalreserve.gov/pubs/homeline/default.htm