Home Equity Application Disclosure

ChoiceOne Bank
Main Office
109 E. Division
POBox186
Sparta, MI 49345-0186

Important Terms of Our

Home Equity Application Disclosure

This disclosure contains important information about our HELOC 80% LTV (the "Plan"). You should read it carefully and keep a copy for your records.

AVAILABILITY OF TERMS. All of the terms of the Plan described herein 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, your are entitled to a refund of any fees that you paid to us or anyone else in connection with your application.

SECURITY INTEREST. We will take a security interest in your home. You could lose your home if your do not meet the obligations in your agreement with us.

POSSIBLE ACTIONS.Under this Plan, we have the following rights: We can terminate your account, require you to pay us the entire outstanding balance in one payment,
and charge you certain fees if:

a) You engage in fraud or material misrepresentation in connection with the Plan.

b) You do not meet the repayment terms of the Plan.

We can refuse to make additional extensions of credit or reduce your credit limit if:

a) The value of the dwelling securing the Plan declines significantly below it's appraised value for purposes of the Plan.

b) We Reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial circumstances.

c) You are in default of a material obligation of the Plan.

d) Government action prevents us from imposing the annual percentage rate provided for under the Plan or impairs our security interest in such that the value of the interest is less that 120 percent of the credit line.

e) A government authority has notified us that continued advances would constitute a unsafe business practice.

f) The maximum annual percentage rate is reached.

The initial agreement permits us to make changes to the terms of the Plan at specified times or upon the occurrance of specified events.

Fees and Charges.In order to open and maintain an account, you must pay certain fees and charges.

Lender Fees. The following fees must be paid to us.

Late Charge. Your payment will be late if it is not recieved by us within 10 days after the "Payment Due Date" shown on your periodic statement. If your payment is late we may charge you $25.00.

Third Party Fees.You must pay certain fees to third parties such as appraisers, credit reporting firms, and government agencies. These third party fees generally total between $0.00 and $250.00. Upon request, we will provide you with an itemization of the fees you will have to pay to third parties.

PROPERTY INSURANCEYou must carry insurance on the property that secures the Plan.

MINIMUM PAYMENT REQUIREMENTS. You can obtain advances of credit during the following period: 10 years (the "Draw Period"). Your Regular Payment will equal the amount of your accrued FINANCE CHARGES. You will make 119 of these payments. You will then be required to pay the entire balance owing in a single balloon payment. If you make only the minimum payments, you may not repay any of the principal balance by the end of this payment stream. Your payments will be due monthly. Your “Minimum Payment” will be the Regular Payment, plus any amount due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment.

MINIMUM PAYMENT EXAMPLE.If you made only the minimum payment and took no other credit advances, it would take 10 years to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of 8.250%. During that period, you would make 119 monthly payments ranging from $63.29 to $70.07 and one final payment of $10,070.07.

TRANSACTION REQUIREMENTS. The following transaction limitations will apply to the use of your Credit Line:

Credit Line Creditline Check, Telephone Request, Request by Mail, and in Person Request Limitations.There are no transaction limitations for the writing of Creditline Checks, requesting an advance by telephone, requesting an advance by mail or requesting an advance in person.

TAX DECUCTIBILITY.You should consult a tax advisor regarding the deductibility of interest and charges for the plan.

ADDITIONAL HOME EQUITY PROGRAMS.Please ask us about our other available Home Equity Line of Credit plans.

VARIABLE RATE FEATURE.The Plan has a variable rate feature. The ANNUAL PERCENTAGE RATE (corresponding to the periodic rate), and the minimum payment amount can change as a result. The ANNUAL PERCENTAGE RATE does not include costs other than interest.

THE INDEX.The annual percentage rate is based on the value of an index (referred to in this disclosure as the “index”). The Index is the Wall Street Journal Prime Rate. Information about the Index is available or published in the Wall Street Journal. We will use the most recent Index value available to us as of the date of any annual percentage rate adjustment. If the Index is no longer available, we will choose a new Index and margin. The new Index will have an historical movement substantially similar to the original Index, and the new Index and margin will result in an annual percentage rate that is substantially similar to the rate in effect at the time the original Index become unavailable.

ANNUAL PERCENTAGE RATE.To determine the Periodic Rate that will apply to your account, we take the value of the Index, then divide the value by the number of days in a year (daily). To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily). The result is the ANNUAL PERCENTAGE RATE. A change in the Index rate generally will result in a change in the ANNUAL PERCENTAGE RATE. The amount that your ANNUAL PERCENTAGE RATE may change also may be effected by the lifetime annual percentage rate limits, as discussed below.

Please ask us for the current Index value, margin and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you.

FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS.Your ANNUAL PERCENTAGE RATE can change monthly. There is no limit on the amount by which the annual percentage rate can change during any one year period. However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 18.000% per annum at any time during the term of the Plan.

MAXIMUM RATE AND PAYMENT EXAMPLE.If you had an outstanding balance of $10,000, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 18.000% would be $152.88. This ANNUAL PERCENTAGE RATE could be reached immediatelty or prior to the 1^st payment.

PREPAYMENT.If you close your Credit Line before the third anniversary of the opening date, your agree to pay a prepayment fee of Two Hundred Fifty Dollars.

HISTORICAL EXAMPLE.The example below show how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10,000 credit advance would have changed based on changes in the Index from 1992 to 2006. The Index values are from the following reference period: as of the last business day in August each Year. While only one payment per year is shown, payments may have varied during each year. Different outstanding principal balances could result in different payment amounts.

The table assumes that no additional credit advances were taken and the only the minimum payment was made. It does not necessarily indicate how the Index or your payments would change in the future.

INDEX TABLE

(1) This is a margin we have recently used; your margin may be different