MSUFCU Routing Number: 272479663
MSUFCU SWIFT Code: MSUCUS44

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MSU Federal Credit Union | Disclosures | Home Loans

Mortgage & Home Loan Disclosures

This disclosure contains important information about our home equity line-of-credit—Real Estate Secured “Prime Advantage” Equity Loan Plan. You should read it carefully and keep a copy for your records.

Availability of Terms


All of the terms described below are subject to change. If these terms change (other than the ANNUAL PERCENTAGE RATE due to fluctuations in the index) and you decide, as a result, to not enter into an agreement with us, you are entitled to a refund of any fees that you paid 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 amend your line-of-credit plan and implement certain changes as specified in the Prime Advantage Equity Loan Plan Agreement. You may receive from us, upon request, information about the conditions under which such changes may occur. We can terminate your line-of-credit, require you to pay us the entire outstanding balance in one payment, and charge you certain fees if:
 

(1) You engage in fraud or material misrepresentation in connection with the line-of-credit;

(2) You do not meet repayment terms; or

(3) 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:

(1) The value of the dwelling securing the line-of-credit declines significantly below its appraised value for purposes of the credit line;

(2) We reasonably believe that you will not be able to meet the repayment requirements due to a material change in your financial circumstances;

(3) You are in default of a material obligation in the agreement;

(4) Government action prevents us from imposing the annual percentage rate provided or impairs our security interest such that the value of the interest is less than 120% of the credit line;

(5) A regulatory agency has notified us that continued advances will constitute an unsafe and unsound practice; or

(6) The maximum annual percentage rate is reached.


Minimum Payment Requirements


You can obtain advances of credit for 10 years (the "draw period"). During that period payments will be due monthly. Your minimum payment will be equal to 1.50 percent of the "new balance," rounded up to the nearest whole ten dollars, but not less than $20.00. The payment will not change until a subsequent advance is taken. After the draw period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance over 5 years (the "repayment period"). Payments during the repayment period are calculated in the same way as during the draw period. The minimum monthly payment may not pay all of the principal. You will then be required to pay the entire remaining balance in a single "balloon" payment at the end of the repayment period.

Minimum Payment Example


If you took a single $10,000.00 advance and the ANNUAL PERCENTAGE RATE was 4.00% it would take 6 years and 4 months to pay off the advance if you made only the minimum payments of $150.00 per month until the final payment, which would be $78.79.

Fees and Charges


In most cases there are no closing costs* in setting up your Prime Advantage home equity loan. Should you stop payment on a loan check or electronic request drawn on your Prime Advantage loan account, a Stop Payment fee of $20.00 will apply. A Late Fee of $35.00 will apply if your payment is received 7 days or more after the due date. A Non-Sufficient Funds Fee of $25.00 will apply should a check overdraft or electronic loan request exceed your credit limit. The Prime Advantage Platinum Visa Credit Card has a transaction fee for purchases and cash advances equal to 1% of the transaction for International transactions.

You may also be required to pay certain fees to third parties to open this line-of-credit. These fees generally total between $250 and $500. Upon your request, we will provide an itemization of the fees you will have to pay to a third party. Also, you must carry insurance on the property that secures the line-of-credit.

*Bridge loans and out-of-state home equity loan fees may apply.

Tax Deductibility


You should consult a tax adviser regarding the deductibility of interest and charges for the line-of-credit.

Minimum Draw Requirement


The minimum credit advance that you can receive is $250. Your total loan balance cannot exceed your credit limit as established by us.

Variable Rate Information


The line-of-credit has a variable-rate feature, and the ANNUAL PERCENTAGE RATE (corresponding to the daily periodic rate) 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 and your credit score. The index is the Prime Rate published in the Wall Street Journal. To determine the ANNUAL PERCENTAGE RATE that will apply to your credit line, we subtract or add a margin to the value of the index.

Upon your request, we will provide you with the current index value, margin and ANNUAL PERCENTAGE RATE. If you open a credit line, ANNUAL PERCENTAGE RATE information will be provided on periodic statements that we will send you.

Rate Changes


The ANNUAL PERCENTAGE RATE can change monthly. The maximum ANNUAL PERCENTAGE RATE that can apply is 18% APR (the "cap"). There is no limit on the amount by which the rate can change during any one year period.

Maximum Rate and Payment Example


If you had an outstanding balance of $10,000, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% APR would be $150.00. This maximum ANNUAL PERCENTAGE RATE could be imposed within the first month if the index and/or margin increase sufficiently.

Historical Example


The following tables show how the ANNUAL PERCENTAGE RATE for a single $10,000 credit advance would have changed based on changes in the index over the last 15 years. The values are from January 1 of each year. The values shown in the following tables are for Tier 1 rated members with a credit score of 720 or above.

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. It does not necessarily indicate how the index or ANNUAL PERCENTAGE RATE will change in the future. Rate information will be provided on or with each periodic statement you receive from us.

Minimum Monthly Payment 70% LTV

 Year*

Index (%) 

Up to 70% Margin** 

Up to 70% APR (%) 

Minimum Payment ($)*** 

1999 

7.75 

-.25 

7.50

150 

2000 

8.50 

-.25 

8.25

150 

2001 

9.50 

-.25 

9.25

150 

2002 

4.75 

-.25 

4.50

150 

2003

4.25 

-.25 

4.00**** 

150 

2004 

4.00 

-.25 

4.00**** 

150 

2005 

5.25 

-.25 

5.00

150

2006

7.00

-.25

6.75

150

2007

8.25

-.25

8.00

150

2008

7.25

-.25

7.00

150

2009

3.25

-.25

4.00****

150

2010

3.25

-.25

4.00****

150

2011

3.25

-.25

4.00****

150

2012

3.25

-.25

4.00****

150

2013

3.25

-.25

4.00****

150

 

Minimum Monthly Payment 80% LTV

 Year*

Index (%) 

Up to 80% Margin** 

Up to 80% APR (%) 

Minimum Payment ($)*** 

1999 

7.75 

+0.00 

7.75

150 

2000 

8.50 

+0.00 

8.50

150 

2001 

9.50 

+0.00 

9.50

150 

2002 

4.75 

+0.00

4.75

150 

2003 

4.25 

+0.00

4.25**** 

150 

2004 

4.00 

+0.00

4.25**** 

150 

2005 

5.25 

+0.00

5.25

150

2006

7.00

+0.00

7.00

150

2007

8.25

+0.00

8.25

150

2008

7.25

+0.00

7.25

150

2009

3.25

+0.00

4.25****

150

2010

3.25

+0.00

4.25****

150

2011

3.25

+0.00

4.25****

150

2012

3.25

+0.00

4.25****

150

2013

3.25

+0.00

4.25****

150

*Rate stated reflects January 1 rate only.
**This is a margin we have used recently.
***Payment is rounded to the nearest whole dollar.
****Rate stated reflects Floor Rate.

Revised 09/13



To Our Members and Those Eligible to Become Members

MSUFCU wants you to know that with respect to mortgage loans and Home Improvement Loans the following policies are utilized:

  • That any person has the right to make a loan inquiry.

  • That any person has the right to file a written loan application for a mortgage loan or Home Improvement Loan with MSUFCU.

  • That any person has the right to receive a written response to an inquiry or application.

Establishing Creditworthiness
It is the MSUFCU's policy to consider the creditworthiness of an applicant. The general factors used for establishing creditworthiness include:

 

A. Applicant must be a member in good standing with MSUFCU.


B. The applicant's income is sufficient to repay the loan according to its terms.


C. The applicant's total debt load will not impair repayment of the loan requested.


D. The debt ratio of housing expense to income will not impair the repayment of the loan requested.


E. The applicant's past credit history with MSUFCU and other credit grantors has been satisfactory.


F. The applicant's job history and time lived at current address show stability.

Market Value
Market value is the most probable price a property should bring in a competitive and open market under all conditions for a fair sale, assuming the price is not affected by undue stimulus.


MSUFCU will consider the market value of proposed security when evaluating a loan application.

Community Organizations
The presence of an active community group will be taken into consideration for home mortgage and Home Improvement Loans in neighborhoods which are historic or in physical decline.

Lending Area
Home mortgage loans are limited to within the state of Michigan. Home Improvement Loans are made throughout the United States.

Insurance
Regular residential properties require Private Mortgage Insurance (PMI) where the Loan-to-Value Ratio (L-T-V) exceeds 80% of the lesser of the market value or purchase price.

Rate Changes
Rates initially quoted are subject to change during the period prior to closing due to changing economic conditions.

Minimum Loan Amounts
The minimum home mortgage loan amount is $10,000. The minimum Home Improvement Loan amount is $1,000.

Security
Only real estate located within the state of Michigan will be considered for home mortgage loans. Multiple units, up to four, will be considered for first mortgage loans and home equity lines of credit/second mortgages provided that one of the units is owner-occupied.


The residence must have an acceptable appraisal and useful life of not less than the length of the amortization period for the mortgage. The property must have all the usual improvements necessary to sustain acceptable living standards and meet zoning ordinances and laws required for occupancy.


Home Improvement Loans may be granted on an unsecured basis or with the various types of collateral acceptable to MSUFCU.

Special Circumstances
During periods in which there is a shortage of loanable funds, MSUFCU will process all loan applications in the order they are received.

Loan Approvals
With the exception of loans to officials of MSUFCU, the loan officersand underwriters have the responsibility for granting and denying loans to members subject to the restrictions set forth by the board of directors, the bylaws of MSUFCU, and the laws which govern its operation.

Title
MSUFCU requires proof of clear title to the security being offered. Home mortgage loans will require title searches with the appropriate level of title insurance issued through a member company of the American Land Title Association (ALTA).

Appraisal
The objectives of an appraisal are:


A. To establish a current market value.

B. To establish that the security offered does exist.

C. To establish that the property offered as a security does have all the usual improvements necessary to sustain acceptable living standards and meets zoning ordinances and laws required for occupancy.

D. To establish that the residence does have a useful life not less than the amortization period for the mortgage.

The appraisal may affect the amount of the down payment required. The required down payment is based on the lesser value of the purchase price or the market value as established by the appraisal.

Verification of Funds
Certain fees may be involved in applying for a mortgage loan, such as appraisal and rate lock commitment fees. In addition, if the mortgage loan is approved, there will be settlement fees which must also be paid.


MSUFCU reserves the right to verify funds necessary to make the required down payment and cover closing costs.

Ancillary Collateral
Collateral other than real estate being purchased or refinanced will not be considered for home mortgage loans.


Collateral for Home Improvement Loans, if required, will be evaluated on its individual merit and market value.

Property in a Flood Plain
Flood insurance is required on all home mortgage loans where real estate is located in a designated flood hazard area.


Flood insurance is available through the National Flood Insurance Program.

Cosigners/Guarantors
Cosigners/Guarantors are not acceptable on home mortgage loan applications.


Cosigners/Guarantors for Home Improvement Loans must meet the same creditworthiness criteria as the applicant. However, the cosigner/guarantor needs not be a member of MSUFCU.

Additional Criteria
A. The member's signature and/or collateral is sufficient to cover the loan requested.

B. The loan purpose is provident and productive.

C. The applicant is of good character.

D. Property surveys may be required as a condition of issuance of a title insurance policy.

E. Adequate homeowners/hazard insurance is required on all secured loans and maintained for the term of the loan.


Revised 5/12