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 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 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, deed of trust, or deed to secure debt 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 line, require you to pay us the entire outstanding balance in one payment, and charge you certain fees, or we can refuse to make additional extensions of credit or reduce your credit limit 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 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 the agreement.
• 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.

Minimum Payment Requirements: The term of the plan is 20 years (the "term"). You can obtain advances of credit during the entire term. During the term, payments will be due monthly. When your account is opened, we will specify that your minimum monthly payment will equal either:

1. Any amount past due plus the greater of (a) $50, (b) 1.5% of the outstanding balance rounded to the nearest dollar, or (c) the finance charges that have accrued on the outstanding balance (the "Percent of the Balance" option); or
2. Any amount past due plus the finance charges that have accrued on the outstanding balance (the "Interest Only" option).

Making only the minimum payments under the Percent of the Balance option may not repay any or all of the principal balance by the end of the plan, and making only the minimum payments under the Interest Only option will not repay any of the principal balance by the end of the plan. You will then be required to pay the entire balance in a single "balloon" payment.

If you elect to convert all or part of the balance under your line to a fixed rate, the minimum payment will be calculated as described in this paragraph above plus the amount due for the fixed rate portion of your line (see “Option to Convert to Fixed Rate” on page 5).

Minimum Payment Example: If you made only the minimum monthly payments under the Percent of the Balance option and took no other credit advances, it would take 20 years and 0 months to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 8.25%. During that period, you would make 240 monthly payments varying between $151.00 and $50.00 and a final payment of $2.15.  If you made only the minimum monthly payments under the Interest Only option 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 8.25%. During that period, you would make 239 monthly payments of $68.75 and a balloon payment of $10,068.75.

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

• Annual maintenance fee: $50 (due each year) if you do not obtain at least one advance per year.

You also must pay certain fees to third parties to open a line (such as appraisal, credit report and recording fees). These fees generally total between $150 and $2,000 depending on the size of your loan. If you ask, we will give you an itemization of the fees you will have to pay to third parties.

Minimum Draw Requirements: There is no minimum advance requirement on your line. However, if you want to take advantage of our no closing cost offer, you will be required to take an initial advance.

Tax Deductibility: You should consult a tax advisor regarding the deductibility of interest and charges for the line.

Variable-Rate 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 not other costs.  The annual percentage rate is based on the value of an index. The index is the highest prime rate published in the Wall Street Journal’s "Money Rates" table.  The prime rate is merely a reference rate and is not necessarily the best or lowest rate available on a loan. To determine the annual percentage rate that will apply to your line, we may add a margin to the value of the index. The amount of the margin may be based on several factors, including your credit history, and may be higher than the margin used in the example below. The initial annual percentage rate may be “discounted” – it may not be based on the index and margin used to make later rate adjustments.  Ask us for the current index value, margin, discount or premium, and annual percentage rate.  After you open a credit line, rate information will be provided on periodic statements that we will send you.

Rate Changes: The annual percentage rate can change each month. The maximum ANNUAL PERCENTAGE RATE that can apply is 18% (17% in Florida). Except for this 18% “cap” (17% “cap” in Florida), there is no limit on the amount by which the rate can change during any one-year period.

Maximum Rate and Payment Example (Except Florida Residents): If you had an outstanding balance of $10,000 during the term, the minimum monthly payment under the Percent of the Balance option at the maximum ANNUAL PERCENTAGE RATE of 18% would be $152.00, and the minimum monthly payment under the Interest Only option 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 term.

Maximum Rate and Payment Example for Florida Residents: If you had an outstanding balance of $10,000 during the term, the minimum monthly payment under the Percent of the Balance option at the maximum ANNUAL PERCENTAGE RATE of 17%
would be $152.00, and the minimum monthly payment under the Interest Only option at the maximum ANNUAL PERCENTAGE RATE of 17% would be $141.67. This annual percentage rate could be reached during the first month of the term.

Historical Example: The following table shows 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 last business day in July of each year. While only one payment amount per year is shown, payments would have varied during each year under the Percent of the Balance option.
The table assumes that no additional credit advances were taken, that only the minimum payments were made each month, that the rate remained constant during the year, and that you did not convert any portion of your line to a fixed rate and repayment term. The table does not necessarily indicate how the index or your payments will change in the future

Minimum Monthly Payments                          

* This is a margin we have used recently.

** This Annual Percentage does not reflect any promotional or introductory rate that may be in place at the time the account is opened.
NOTE: Under this example, the lifetime interest rate cap was never reached. The maximum ANNUAL PERCENTAGE RATE that could have been reached is 18% except in Florida where it is 17%.

Option to Convert to Fixed Rate:

General: You may convert all or part of the balance under your line to a fixed rate with a fixed repayment term.  If the variable annual percentage rate on your line exceeds the Maximum Rate, you can not convert any part of your line to a fixed rate at that time.  You can not convert any part of your line which has already been converted to a fixed rate to another fixed rate.  The minimum amount that you may convert to a fixed rate is $5,000. You may have no more than 10 fixed rate balances outstanding under your line at any one time.

Repayment Period: You may select a repayment period of either 3, 5, 10 or 15 years if the repayment period you select does not extend beyond the term of your line. If you request a repayment period which extends beyond the term of your line, your request will not be granted.  If less than 3 years remains on the term of your line at the time we receive your request, your request will not be granted.

Fixed Rate Information: The annual percentage rate (corresponding to the periodic rate) for the fixed rate portion of your line will be determined at the time of your request to convert a balance to a fixed rate.  After the annual percentage rate for the fixed rate portion of your line is determined, it will not increase or decrease.  The ANNUAL PERCENTAGE RATE for the fixed rate portion of your line will be the index plus the margin described in the section titled “Variable Rate Information” above, plus an additional margin of:

• .90% if you select a 3 year repayment term;
• 1.30% if you select a 5 year repayment term;
• 2.00% if you select a 10 year repayment term;
• 2.70% if you select a 15 year repayment term.

However, the ANNUAL PERCENTAGE RATE for the fixed rate portion of your line will never be greater than the Maximum Rate nor less than 6%.  The annual percentage rate for the fixed rate portion of your line includes only interest and not other costs.

Monthly Payments For Fixed Rate Portion of Your Line: The minimum payment due for the fixed rate portion of your line will be the amount that would be required in order to pay the entire fixed rate portion of your line in full in substantially equal payments at the fixed annual percentage rate over the repayment period for the fixed rate portion of your line.  If you make all payments on the fixed rate portion of your line when they are due, you will repay substantially all of the fixed rate portion of your line in substantially equal payments by the time your line is terminated.  The minimum payment due for the fixed rate portion of your line will be added to the minimum payment due for the variable rate portion of your line. Any remaining balance in the fixed rate portion of your line at the end of the repayment period for the fixed rate portion of your line will automatically be added back to the variable rate portion of your line.

Conversion Procedure and Fee: To convert all or part of the balance under your line to a fixed rate, you must make a request in writing.  Your request must include the amount that will bear interest at a fixed rate and the repayment period you desire. We will impose a fee each time you convert a balance to a fixed rate. This fee is a FINANCE CHARGE in the amount of $100.

Key Facts about Interest Only Features

At Regions Bank, an interest-only feature is available for our home equity lines of credit.  However, you must meet our credit qualifications to get this feature.  The following information will help you decide if this option is right for you.

Whether you are buying a house or refinancing your mortgage, this information can help you decide if an interest-only mortgage or line of credit is right for you.

An “interest-only” mortgage or line of credit allows you to pay only the interest on the money you borrower for the first few years of the mortgage or line.  This is known as the “interest-only period” (for example, the first 5 years of the loan or line.)  If you only pay the amount of interest that’s due, once the interest-only period ends:

• You will still owe the original amount you borrowed.
• Your monthly payment will increase – even if interest rates stay the same – because you must pay back the principal as well as the interest.
• Ask what the payments on your loan will be after the end of the interest-only period.  If you are considering the interest-only feature, ask about what your payments can be if interest rates increase.

Additional Information

• Home Equity:   Home equity is created when the value of your home increases and/or when you reduce the amount you owe on your home through your loan payments.  If your home does not increase in value and you make interest-only payments, you are not building equity.  And, if you make only the minimum payments on a mortgage or line of credit, your final payment may result in a balloon payment at the end of the term.  This may make it harder to refinance your mortgage or line of credit, or to receive funds from the sale of your home.  In fact, if the amount you owe on your home, along with the costs associated with selling it (such as the real estate sales commissions and closing costs) exceeds the sales price, you will not receive any cash when you sell, and will have to pay additional funds to your lender or to other parties when you pay off your mortgage.

If you are in the market for credit, a home equity plan may be right for you. Or perhaps another form of credit would be better. Before making a decision, 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 risk. And remember, failure to repay the amounts you've borrowed, plus interest, could mean the loss of your home.

Glossary
Where to Go For Help
Home Equity Plan Checklist

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 the home is likely to be a consumer's largest asset, many homeowners use their credit lines only for major items such as education, home improvements, or medical bills and not for day-to-day expenses.

With a home equity line, you will be approved for a specific amount of credit--your credit limit , the maximum amount you may borrow at any one time under the plan. 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, 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 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 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) and to keep a minimum amount outstanding. Some plans may also require that you take an initial advance when the line is set up.

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. The APR for a home equity line is based on the interest rate alone and will not reflect the closing costs and other fees and charges, so you'll need to compare these costs, as well as the APRs, among lenders.

Interest rate charges and related plan features
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); the interest rate for borrowing under the home equity line changes, mirroring fluctuations 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 as well as the amount of the margin.

Lenders sometimes offer a temporarily discounted interest rate for home equity lines--a rate that is unusually low and may last for only an introductory period, such as 6 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 interest rates drop.

Some lenders allow you to convert from a variable interest rate to a fixed rate during the life of the plan, or to convert all or a portion of your line to a fixed-term installment loan.

Plans generally permit the lender to freeze or reduce your credit line under certain circumstances. For example, some variable-rate plans may not allow you to draw additional funds during a period in which the interest rate reaches the cap.

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 buy a home.

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).
• Closing costs, including fees for attorneys, title search, and 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. 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.

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 minimum payments that cover a portion of the principal (the amount you borrow) plus accrued interest. But (unlike with the typical installment loan) the portion that goes toward principal may not be enough to repay the principal by the end of the term. Other plans may allow payment of interest alone 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 plan ends.

Regardless of the minimum required payment, you may choose to pay more, and many lenders offer a choice of payment options. 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.

Lines 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. A second mortgage provides you with a fixed amount of money repayable over a fixed period. In most cases the payment schedule calls for equal payments that will 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.

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 enter into the plan because of the change.