HELOC Important Terms and What you should know about home equity lines of credit
IMPORTANT TERMS OF OUR EZ-LOCK 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. In this disclosure, the words "you" and "your" refer to each person who signs the Home Equity Line of Credit Agreement, Note and Disclosure Statement and "we", "our" and "us" refer to Cambridge Savings Bank.
AVAILABILITY OF TERMS
All of the terms described below are subject to change. If any of these terms change (other than the Annual Percentage Rate) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees that you 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
We can terminate your account, require you to pay us the entire outstanding balance in one payment and charge you certain fees if:
- You engage in fraud or material misrepresentation in connection with the line.
- You do not meet the repayment terms.
- Your action or inaction adversely affects the collateral or our rights in the collateral.
We can refuse to make additional extensions of credit or reduce your credit limit if:
- The value of the dwelling securing the line declines significantly below its appraised or assessed value for purposes of the line.
- We reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial circumstances.
- You are in default of a material obligation in your agreement with us.
- Government action prevents us from imposing the annual percentage rate provided for or impairs our security interest such that the value of the interest is less than 120 percent of the credit line.
- A regulatory agency has notified us that continued advances would constitute an unsafe and unsound practice.
- The maximum annual percentage rate is reached.
LOAN AMOUNT LIMITATIONS
We generally allow for lines of credit with a minimum of $25,000 and a maximum:
- $250,000 for single-family owner-occupied residences up to 80% combined loan-to-value (CLTV), two-family primary residences up to 80% CLTV, and three- or four-family primary residences up to 75% CLTV; and
- $500,000 for single-family primary residences up to 75% CLTV.
Your terms may vary.
MINIMUM PAYMENT REQUIREMENTS
You can obtain advances of credit for 10 years (the "Draw Period"). During the draw period, payments will be due monthly. Your minimum monthly payment will be an amount equal to one of the below:
- The monthly payment due on any unpaid Converted Balance as described below, plus the sum of all finance charges that have accrued during the billing cycle (referred to as "Payment Plan A"), or
- The monthly payment due on any unpaid Converted Balance, as described below, plus one-half of one percentage point (1/2%) of the outstanding principal balance as of the last day of the billing cycle plus all finance charges that have accrued during the billing cycle (referred to as "Payment Plan B").
If you do not choose Payment Plan A or Payment Plan B, we will default to Payment Plan A.
Your minimum monthly payment will also include any past due amounts and any amounts by which your outstanding principal balance exceeds your credit limit.
You will have a one-time only option, at any time during the Draw Period, to elect a different minimum monthly payment by delivering your written request to us indicating your desire to change to Payment Plan A or B as applicable. We will implement any change to your minimum monthly payment as soon as practicable after receiving your written request and in no event more than 90 days following our receipt of your request.
After the draw period ends, you will no longer be able to obtain credit advances, and must repay the entire outstanding unpaid principal balance (the "Balance"), plus finance charges thereon, over 20 years (the "Repayment Period"). During the Repayment Period, payments will be due monthly. Your minimum monthly payment will equal 1/240th of the Balance plus the finance charges that have accrued on the remaining Balance plus any past due amounts. Your minimum monthly payment shall be adjusted in each billing cycle to reflect changes in the Annual Percentage Rate.
MINIMUM PAYMENT EXAMPLES
Example 1.
5.99% for 12 months then Prime Rate minus .25% with a Floor of 3.00%
For new customers without a current CSB Home Equity Line of Credit or a CSB Home Equity Loan.
If you made only the minimum monthly payment and took no other credit advances, it would take 30 years to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 7.25%.
During that period, under Payment Plan A, you would make 120 monthly payments varying between: $59.59 and $59.59 followed by 240 monthly payments varying between $41.91 and $101.26 at an ANNUAL PERCENTAGE RATE of 7.25% (Example 1).
During that period, under Payment Plan B, you would make 120 monthly payments varying between: $60.36 and $109.59 followed by 240 monthly payments varying between $22.97 and $55.48 at an ANNUAL PERCENTAGE RATE of 7.25% (Example 1).
Example 2.
Prime Rate minus .25% with a Floor of 3.00%
For existing CSB Home Equity Line of Credit or CSB Home Equity Loan customers.
If you made only the minimum monthly payment and took no other credit advances, it would take 30 years to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 7.25%.
During that period, under Payment Plan A, you would make 120 monthly payments varying between: $59.59 and $59.59 followed by 240 monthly payments varying between $41.91 and $101.26 at an ANNUAL PERCENTAGE RATE of 7.25% (Example 2).
During that period, under Payment Plan B, you would make 120 monthly payments varying between: $60.36 and $109.59 followed by 240 monthly payments varying between $22.97 and $55.48 at an ANNUAL PERCENTAGE RATE of 7.25% (Example 2).
Example 3.
For homes currently listed for sale (Bridge Loans) Prime Rate plus 1.5% with a Floor of 4.00%
If you made only the minimum monthly payment and took no other credit advances, it would take 30 years to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 9.00%.
During that period, under Payment Plan A, you would make 120 monthly payments varying between: $73.97 and $73.97 followed by 240 monthly payments varying between $41.97 and $115.64 at an ANNUAL PERCENTAGE RATE of 9.00% (Example 3).
During that period, under Payment Plan B, you would make 120 monthly payments varying between: $68.28 and $123.97 followed by 240 monthly payments varying between $23.00 and $63.37 at an ANNUAL PERCENTAGE RATE of 9.00% (Example 3).
FEES AND CHARGES
| FEE DESCRIPTION | FEE AMOUNT |
|---|---|
| Annual maintenance fee (not applicable for Performance Plus or CSB@Work Checking customers) | $50 |
| Appraisal fee for properties that are currently listed for sale | $500-$1,100 |
| Trust fee for properties in trust | $355 |
| Termination fees for agreements terminated within thirty-six months of the date of the Agreement (for any reason) | Lesser of $500 or 2% of the credit limit at account opening |
| Origination Fee (Bridge HELOCs only) | $1,500 |
IMPORTANT NOTES ABOUT FEES
- If you are applying for Bridge Financing, a termination fee will not apply if the mortgaged property is sold
- Satisfactory property insurance is required
- Flood insurance may be required
Third party fees ranging from $977-$1,281 may apply. If you ask, we will provide you with an itemization of the fees paid to third parties.
MINIMUM DRAW REQUIREMENTS
The minimum credit advance that you can receive by check is $500.
TAX DEDUCTIBILITY
You should consult a tax advisor regarding the deductibility of interest and charges under the Account.
VARIABLE RATE INFORMATION
The Account has a variable rate feature and the Annual Percentage Rate (corresponding to the period 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 published in The Wall Street Journal under the heading "Money Rates" on our first business day of the month in which the billing cycle begins.
If there is more than one rate published as the Prime Rate, the applicable Annual Percentage Rate will be based on the highest such Prime Rate published. To determine the Annual Percentage Rate that will apply to your Line, we add a margin to the value of the index. Ask us for the current index value, margin and Annual Percentage Rate. After you open your Account, rate information will be provided on the periodic statements that we will send you.
INITIAL ANNUAL PERCENTAGE RATE DISCOUNT
This discount is available only for NEW CUSTOMERS WITHOUT A CURRENT CSB HOME EQUITY LINE OF CREDIT OR A HOME EQUITY LOAN (Example 1): The initial annual percentage rate is “discounted”. It is not based on the index and margin used for later rate adjustments. The initial discount rate will be in effect for 12 months. The ANNUAL PERCENTAGE RATE is 5.99% for the first 12 months, converting to Prime minus .25% for the remainder of the term. The minimum ANNUAL PERCENTAGE RATE that can apply for the life of the line is 3.00%. As of 01/03/2023, Prime Rate was 7.50%.
FIXED RATE LOAN OPTION
During the Draw Period, you may elect to convert some or all of the outstanding balance of your Account to a fixed rate loan, called a “Converted Balance Loan”. This option is not available for homes listed for sale (Bridge Loans). Conversions are subject to the following rules:
- Minimum conversion amount is $10,000.
- Terms of Converted Balance Loan are 60, 120, 180 or 240 months, but never greater than the maturity date.
- No more than 3 Converted Balance Loans outstanding at any time.
- Annual percentage rate for the Converted Balance Loan is determined at time you request a conversion. The rate will depend on the term you choose and will be equal to the lower of an index plus a margin or the Cambridge Savings Bank Fixed Rate Home Equity Loan rate in effect and available on the Cambridge Savings Bank Consumer Loan Rate Sheet on the day that you request the conversion. For indexed loans, depending on the term of your loan, the Index is either the Federal Home Loan Bank (FHLB) Boston 5, 10, 15 or 20 year Classic Advance Regular Rate, as in effect on the last day of the previous month in which you request the conversion plus a margin of 3.00% rounded up to the nearest 1/8th%. Ask us for information about the current index values.
RATE CHANGES
The Annual Percentage Rate can change each month. The minimum ANNUAL PERCENTAGE RATE that can apply is 3.00% with the exception of the Bridge HELOC, which has a floor of 4.00%. The maximum ANNUAL PERCENTAGE RATE that can apply is 18%. There is no limit on the amount by which the rate can change during any one-year period.
MAXIMUM RATE AND PAYMENT EXAMPLES
If you had an outstanding balance of $10,000 at the beginning of the Draw Period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $147.95 under Payment Plan A and $197.95 under Payment Plan B. This Annual Percentage Rate could be reached during the thirteenth month of the Draw Period for the New Customer Initial Discount Rate (Example 1) and during the first month of the Draw Period for other lines of credit (Example 2 and Example 3).
If you had an outstanding balance of $10,000 at the beginning of the Repayment Period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $189.62. This Annual Percentage Rate could be reached during the first month of the repayment period.
PROPERTY STATUS
The rates listed are for properties owned and occupied as a primary residence or second home by all borrowers.
HISTORICAL EXAMPLE
The following tables show how the Annual Percentage Rate and the minimum monthly payments for a single $10,000 credit advance would have changed based on changes in the index over the past 15 years. The index values are from the 3rd day in January of each year. While only one payment per year is shown, payments would have varied during each year.
The tables assume that no additional credit advances were taken, that only the minimum payments were made each month, and that the rate remained constant during each year. They do not necessarily indicate how the index or your payments will change in the future.
Example 1
5.99% FOR 12 MONTHS WITH A FLOOR OF 3.00%
| YEAR | INDEX RATE (%) | MARGIN* (%) | APR (%) | MIN. PLAN A | MIN. PLAN B |
|---|---|---|---|---|---|
| 2009 DRAW | NA | 0 | 5.99*** | 49.23 | 99.23 |
| 2010 PERIOD | 3.25 | -0.25 | 3.00 | 24.66 | 70.30 |
| 2011 | 3.25 | -0.25 | 3.00 | 24.66 | 66.19 |
| 2012 | 3.25 | -0.25 | 3.00 | 24.66 | 62.33 |
| 2013 | 3.25 | -0.25 | 3.00 | 24.66 | 58.69 |
| 2014 | 3.25 | -0.25 | 3.00 | 24.66 | 55.26 |
| 2015 | 3.25 | -0.25 | 3.00 | 24.66 | 52.04 |
| 2016 | 3.50 | -0.25 | 3.25 | 26.71 | 50.35 |
| 2017 | 3.75 | -0.25 | 3.50 | 28.77 | 48.68 |
| 2018 | 4.50 | -0.25 | 4.25 | 34.93 | 49.43 |
| 2019 REPAYMENT | 5.50 | -0.25 | 5.25 | 84.82 | 46.48 |
| 2020 PERIOD | 4.75 | -0.25 | 4.50 | 76.81 | 42.08 |
| 2021 | 3.25 | -0.25 | 3.00 | 63.86 | 34.99 |
| 2022 | 3.25 | -0.25 | 3.00 | 62.63 | 34.32 |
| 2023 | 7.50 | -0.25 | 7.25 | 89.34 | 48.95 |
01.23
* This is a margin we have used recently.
*** This ANNUAL PERCENTAGE RATE (APR) reflects a discount we have used recently
Example 2
PRIME RATE MINUS .25% WITH A FLOOR OF 3.00%
| YEAR | INDEX RATE (%) | MARGIN* (%) | APR (%) | MIN. PLAN A | MIN. PLAN B |
|---|---|---|---|---|---|
| 2009 DRAW | 3.25 | -0.25 | 3.00 | 24.66 | 74.66 |
| 2010 PERIOD | 3.25 | -0.25 | 3.00 | 24.66 | 70.30 |
| 2011 | 3.25 | -0.25 | 3.00 | 24.66 | 66.19 |
| 2012 | 3.25 | -0.25 | 3.00 | 24.66 | 62.33 |
| 2013 | 3.25 | -0.25 | 3.00 | 24.66 | 58.69 |
| 2014 | 3.25 | -0.25 | 3.00 | 24.66 | 55.26 |
| 2015 | 3.25 | -0.25 | 3.00 | 24.66 | 52.04 |
| 2016 | 3.50 | -0.25 | 3.25 | 26.71 | 50.35 |
| 2017 | 3.75 | -0.25 | 3.50 | 28.77 | 48.68 |
| 2018 | 4.50 | -0.25 | 4.25 | 34.93 | 49.43 |
| 2019 REPAYMENT | 5.50 | -0.25 | 5.25 | 84.82 | 46.48 |
| 2020 PERIOD | 4.75 | -0.25 | 4.50 | 76.81 | 42.08 |
| 2021 | 3.25 | -0.25 | 3.00 | 63.86 | 34.99 |
| 2022 | 3.25 | -0.25 | 3.00 | 62.63 | 34.32 |
| 2023 | 7.50 | -0.25 | 7.25 | 89.34 | 48.95 |
01.23
* This is a margin we have used recently.
Example 3
BRIDGE LOAN CUSTOMERS: PRIME RATE + 1.50% WITH A FLOOR OF 4.00%
| YEAR | INDEX RATE (%) | MARGIN* (%) | APR (%) | MIN. PLAN A | MIN. PLAN B |
|---|---|---|---|---|---|
| 2009 DRAW | 3.25 | 1.50 | 4.75 | 39.04 | 89.04 |
| 2010 PERIOD | 3.25 | 1.50 | 4.75 | 39.04 | 83.84 |
| 2011 | 3.25 | 1.50 | 4.75 | 39.04 | 78.95 |
| 2012 | 3.25 | 1.50 | 4.75 | 39.04 | 74.34 |
| 2013 | 3.25 | 1.50 | 4.75 | 39.04 | 70.00 |
| 2014 | 3.25 | 1.50 | 4.75 | 39.04 | 65.91 |
| 2015 | 3.25 | 1.50 | 4.75 | 39.04 | 62.06 |
| 2016 | 3.50 | 1.50 | 5.00 | 41.10 | 59.79 |
| 2017 | 3.75 | 1.50 | 5.25 | 43.15 | 57.57 |
| 2018 | 4.50 | 1.50 | 6.00 | 49.32 | 57.80 |
| 2019 REPAYMENT | 5.50 | 1.50 | 7.00 | 99.20 | 54.36 |
| 2020 PERIOD | 4.75 | 1.50 | 6.25 | 90.47 | 49.57 |
| 2021 | 3.25 | 1.50 | 4.75 | 76.81 | 42.08 |
| 2022 | 3.25 | 1.50 | 4.75 | 74.85 | 41.02 |
| 2023 | 7.50 | 1.50 | 9.00 | 100.85 | 55.26 |
01.23
* This is a margin we have used recently.
APPRAISAL NOTICE
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.
IMPORTANT INFORMATION
Massachusetts General Laws, Chapter 184, Section 17B The following disclosures are made pursuant to Chapter 184, Section 17B of the general laws as amended.
-
The responsibility of the attorney for the mortgagee is to protect the interest of the mortgagee.
-
The mortgagor, may at his own expense, engage an attorney of his own selection to represent his own interests in the transaction. Neither Cambridge Savings Bank, nor any of its employees or agents, makes any representation or warranty whatsoever concerning the tax consequences of the borrower(s) establishing or using this Home Equity Line of Credit, including the deductibility of the interest. Furthermore, Cambridge Savings Bank, its employees and agents, will not be liable in the event the interest on this Home Equity Line of Credit is not deductible. You should consult your tax advisor for guidance on this subject. The appraisal fee, if applicable, is non-refundable once an appraisal has been ordered by the bank whether or not the loan is closed.
WHAT YOU SHOULD KNOW ABOUT HOME EQUITY LINES OF CREDIT
Please click here to review the What you should know about home equity lines of credit document.