Five-Year Balloon Disclosure

Please read the disclosure below and click Apply Now to continue.

HUDSON VALLEY BANK
21 SCARSDALE ROAD
YONKERS, NEW YORK 10707-3205

You have applied to the Lender for a five year balloon loan secured by a first mortgage. This disclosure provides a brief description of the general terms and operation of the loan. It is not a commitment to make a loan to you. If the Lender offers to make you a loan and you accept it, you should carefully read the Promissory Note, Deed of Trust or Mortgage and any other documents you sign. These documents establish your rights and obligations as a borrower.

KEY TERMS OF THE FIVE YEAR BALLOON FIRST MORTGAGE

Loan Term

Your loan payment schedule is based on a 30 Year repayment term. For example, the aggregate interest at the end of five (5) years paid on a $100,000 loan at ten percent (10%) interest on a thirty (30) year schedule, would be approximately $49,228.47 and the monthly payment of principal and interest would be $877.58. AT THE END OF FIVE (5) YEARS, THE PRINCIPAL BALANCE REMAINING UNPAID WILL BE DUE IN FULL, PLUS ANY INTEREST ACCRUED THEREON, PLUS ANY OTHER UNPAID CHARGES DUE BUT NOT COLLECTED DURING THE TERM OF THE LOAN.

For example, on a $100,000 loan on a thirty (30) year payment schedule, the principal balance remaining after five (5) years would be $96,645.83.

Balloon Interest Rate

The interest rate on your loan is fixed for five (5) years and is not subject to increase or decrease. Your interest rate will be established five (5) days prior to closing. If your loan application is approved, you will then be advised of the approval by a letter. The Loan Approval Letter will disclose to you the interest rate, term, monthly payment amount, loan fees and other charges that will apply to your loan.

Late Charge for Overdue Payment

If the Lender does not receive the full amount of your monthly payment within fifteen (15) calendar days after the due date, you will be obligated to pay a late charge. The amount of the late charge will be two percent (2.00%) of the overdue payment of principal and interest.

Prepayment Charge

You have the right to prepay the whole or any part of your loan at any time. There is no charge for prepayment.

Loan Call (Due-on-Sale)

The Lender has the right to declare the entire principal balance of your loan immediately due and payable if you convey, transfer or assign the property described in the Deed of Trust or Mortgage, or any portion or interest in the property, without our prior written consent. If the debt to the Lender is not paid upon receiving this demand for payment, the Lender may institute foreclosure proceedings against you.

Additional Contingencies Which May Lead to a Loan Becoming Due

The Lender has the right to declare the entire principal balance immediately due and payable if you fail to fulfill the obligations set forth in the loan documents, such as:

You promise to pay all sums due under the Promissory Note and Deed of Trust or Mortgage, including all monthly payments of principal and interest, as well as to promptly pay, on a monthly basis if required, all taxes, insurance premiums and similar charges.
Your obligation to keep the property that secures the loan in good repair, to maintain adequate insurance on the property and to promptly repair the property if it is damaged.
Your obligation to comply with all other terms and conditions contained in the loan documents.

Additionally, the following are circumstances under which the loan may become due or which may result in the forced sale of the property:

Your title to the property is lost by execution sale or any other legal process.

A suit is brought to deprive you of your title or to condemn the property as being unfit for human use or to abate a nuisance.

Escrow/Impound Accounts

The loan documents give the Lender the right to require you to pay monthly amounts to an escrow/impound account for future payment of any one or more of the following items: real estate taxes, assessments, hazard insurance, private mortgage insurance (PMI*), ground lease payments, homeowners association dues and other charges which may affect the Lender’s security interest in the property. These monthly escrow/impound payments equal 1/12 of the annual amounts due for payment of these items, based on reasonable estimates by the Lender initially, and from time to time, of the amounts that will be due. If you are required to make payments into an escrow/impound account and fail to do so, the Lender has the right to declare the entire principal balance immediately due and payable. If an escrow/impound account is required, you will be notified in the Loan Approval Letter.

Escrow/Impound payments are not part of your monthly principal and interest payment, but will appear as part of the total amount due on your monthly billing. This escrow/impound payment may change from year to year as your taxes and assessments or PMI premiums change. The Lender will then apply these funds to pay said taxes and assessments and insurance premiums. On the initial funding of the loan, a pro rata reserve is required as a deposit toward payment of the item on the next due date.

If the Lender has to pay delinquent taxes or fire insurance premiums to prevent cancellation, or unpaid liens or charges relating to the property because no escrow/impound account has been established for that expense or because there are insufficient funds in the escrow/impound account to pay the item, then the Lender will bill you for the items paid. You will be obligated to repay these items and failure to do so will constitute default on your loan. The Lender may also require establishment of an escrow/impound account, if one hasn’t already been established, to pay these items in the future.

* Please note, private mortgage insurance (PMI) is not life or disability insurance. PMI protects only the interest of the Lender.

SIGN AND RETURN THIS DISCLOSURE TO HUDSON VALLEY BANK, N.A.

_______________________________________ Signature Date

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