(GENERIC) ADJ RATE HELOC (PRIME LESS .25%)

This disclosure contains important information about our (GENERIC) Adj Rate HELOC (Prime less .25%). You should read it carefully and keep a copy for your records.

1. 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.

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

3. POSSIBLE ACTIONS . Under certain circumstances, we can:

• Terminate your line of credit and require you to pay us the entire outstanding balance in one payment, and charge you certain fees;
• Refuse to make additional extensions of credit; and
• Reduce your credit limit.

4. MINIMUM PAYMENT REQUIREMENTS . You can obtain credit advances for 10 years (the draw period). When you open your line of credit you can choose to make monthly payments. Under either payment option, your minimum payment will equal the following:

• * The amount of accrued finance charges on the last day of the billing cycle.

The minimum payment amount will be rounded to the nearest $.01. Under the monthly payment options, the minimum payments during the draw period will not reduce the principal that is outstanding on your line of credit.

After the draw period ends, you will no longer be able to obtain credit advances and must pay the outstanding balance on your line of credit (the "repayment period.") The length of the repayment period is 15 years. During the repayment period, payments will be due monthly. Under either payment option, your minimum payment will equal the following:

• * An amortized payment of the loan account balance on the last day of the draw period. This balance will be amortized over 180 months.

The minimum payment will change whenever the annual percentage rate changes. The minimum payment amount will be rounded to the nearest $.01. Under the monthly payment option, the minimum payments may not be sufficient to fully repay the principal that is outstanding on your line of credit by the end of the repayment period. If they are not, you will then be required to pay the entire balance in a single payment.

Balances less than $100.00 must be paid in full.

5. MINIMUM PAYMENT EXAMPLE . If you made only the minimum monthly payment and took no other credit advances, it would take 25 years to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 8.00%. During that period, you would make 120 payments of $66.67 followed by 179 payments of $95.57, with a final payment of $93.99.

6. FEES AND CHARGES . To open and maintain a line of credit, you must pay the following fees to us:

• NY State Mtg Tax: $100.00 (due at closing)
• Filing Fees: $75.00 (due at closing)
• NY State Mtg Tax: $25.00 (pd by lender)
• Credit Report: $10.60 (due at closing)
• Appraisal Fee: $110.00 (due at closing)
• Flood Certificate: $25.00 (due at closing)
• Bank Attorney : $250.00 (due at closing)
• Title Insurance: $125.00 (due at closing)

The cost of any title insurance and mortgage recording tax will be based on the maximum amount of credit available to you, whether it has been advanced or not.

7. REFUNDABILITY OF FEES. If you decide not to enter into this plan within three days of receiving this disclosure and the Home Equity Booklet, you are entitled to a refund of any fee you may have already paid.

8. MINIMUM DRAW REQUIREMENTS . The minimum credit advance that you can receive is $200.00. The minimum initial credit advance must be at least $200.00.

9. TAX DEDUCTIBILITY . You should consult a tax advisor regarding the deductibility of interest and charges for the line of credit.

10. VARIABLE RATE FEATURES . This line of credit has a variable rate feature and the annual percentage rate (corresponding to the periodic rate) and the minimum monthly 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 HIGHEST RATE on corporate loans posted by at least 75% of the USA's thirty largest banks known as the Wall Street Journal Prime Rate and is published in the Wall Street Journal. To determine the annual percentage rate that will apply to your line of credit, we add a margin to the value of the index and then round to the nearest .125 percent.. The initial annual percentage rate is discounted - it is not based on the index and margin used for later rate adjustments. The initial rate will be in effect for 6 months. Ask us for the current index value, margin, discount and annual percentage rate. After you open a line of credit, rate information will be provided on periodic statements that we send you.

11. RATE CHANGES. The annual percentage rate can change monthly after remaining fixed for 6 months. There is no limit on the amount by which the rate can change in any one year period. The maximum ANNUAL PERCENTAGE RATE that can apply during the line of credit is 14.5000 percent. The minimum ANNUAL PERCENTAGE RATE that can apply during the line of credit is 4.250 percent.

12. MAXIMUM RATE AND PAYMENT EXAMPLES . If you had an outstanding balance of $10,000.00 at the beginning of the draw period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 14.500 percent would be $120.83. The maximum annual percentage rate could be reached in the 1 st month (1 month) following an initial hold of 6 months.

Under the monthly payment option, if you had an outstanding balance of $10,000.00 at the beginning of the repayment period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 14.500 percent would be $136.55. The maximum annual percentage rate during the repayment period could be reached in the 2 nd month (2 months).

13. ADDITIONAL TERMS . A Prepayment Penalty equal to the sum of the Bank paid fees associated with the processing and closing of the loan will be assessed if the credit is paid in full and satisfied/terminated within 36 months from the effective date of the line of credit.

• HISTORICAL EXAMPLES . The following table shows how the annual percentage rate and the minimum payments for a single $10,000.00 credit advance would have changed based on changes in the index over the last 15 years. The index values are from the first business day of January. While only one payment amount per year is shown, payments would have varied during each year. The table assumes that no additional credit advances were taken, that only the minimum payment was made, and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments would change in the future.

NOTICE TO FIRST LIEN MORTGAGE LOAN APPLICANTS: THE RIGHT TO COLLECT YOUR MORTGAGE LOAN PAYMENTS MAY BE TRANSFERRED. FEDERAL LAW GIVES YOU CERTAIN RELATED RIGHTS. IF YOUR LOAN IS MADE, SAVE THIS STATEMENT WITH YOUR LOAN DOCUMENTS. SIGN THE ACKNOWLEDGMENT AT THE END OF THIS STATEMENT ONLY IF YOU UNDERSTAND ITS CONTENTS.

Because you are applying for a mortgage loan covered by the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. Section 2601 et seq.) you have certain rights under that Federal law.

This statement tells you about those rights. It also tells you what the chances are that the servicing for this loan may be transferred to a different loan servicer. "Servicing" refers to collecting your principal, interest and escrow account payments, if any. If your loan servicer changes, there are certain procedures that must be followed. This statement generally explains those procedures.

Transfer practices and requirements

If the servicing of your loan is assigned, sold, or transferred to a new servicer, you must be given written notice of that transfer. The present loan servicer must send you notice in writing of the assignment, sale or transfer of the servicing not less than 15 days before the effective date of the transfer. The new loan servicer must also send you notice within 15 days after the effective date of the transfer. The present servicer and the new servicer may combine this information in one notice, so long as the notice is sent to you 15 days before the effective date of transfer. The 15 day period is not applicable if a notice of prospective transfer is provided to you at settlement. The law allows a delay in the time (not more than 30 days after a transfer) for servicers to notify you, upon the occurrence of certain business emergencies.

Notices must contain certain information. They must contain the effective date of the transfer of the servicing of your loan to the new servicer, and the name, address, and toll-free or collect call telephone number of the new servicer, and toll-free or collect call telephone numbers of a person or department for both your present servicer and your new servicer to answer your questions. During the 60 day period following the effective date of the transfer of the loan servicing, a loan payment received by your old servicer before its due date may not be treated by the new loan servicer as late, and a late fee may not be imposed on you.

Complaint Resolution

Section 6 of RESPA (12 U.S.C. Section 2605) gives you certain consumer rights, whether or not your loan servicing is transferred. If you send a "qualified written request" to your servicer, then your servicer must provide you with a written acknowledgment within 20 Business Days of receipt of your request. A "qualified written request" is a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, which includes your name and account number, and the information regarding your request. Not later than 60 Business Days after receiving your request, your servicer must make any appropriate corrections to your account, or must provide you with a written clarification regarding any dispute. During this 60 Business Day period, your servicer may not provide information to a consumer reporting agency concerning any overdue payment related to such period or qualified written request.

A Business Day is any day in which the offices of the business entity are open to the public for carrying on substantially all of its business functions.

Damages and Costs

Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals in circumstances where servicers are shown to have violated the requirements of that Section.

Servicing Transfer Estimates

1. The following is the best estimate of what will happen to the servicing of your mortgage loan:
   • We may assign, sell or transfer the servicing of your loan while the loan is outstanding. We are able to service your loan, and we will service your loan. will not service your loan. haven't decided whether to service your loan.
   • We do not service mortgage loans ( and we have not serviced mortgage loans in the past three years.) We presently intend to assign, sell or transfer the servicing of your mortgage loan. You will be informed about your servicer.
   • We assign, sell or transfer the servicing of some of our loans while the loan is outstanding depending on the type of the loan and other factors. For the program for which you have applied, we expect to sell all of the mortgage servicing retain all of the mortgage servicing assign, sell or transfer ________% of the mortgage servicing.
2. For all mortgage loans that we make in the 12 month period after your mortgage loan is funded, we estimate that the percentage of such loans for which we will transfer servicing is between:
   • 0 to 25%
   • 26 to 50%
   • 51 to 75%
   • 76 to 100%
   This estimate does does not include assignments, sales or transfers to affiliates or subsidiaries.
   
   This is only our best estimate and it is not binding. Business conditions or other circumstances may affect our future transferring decisions.
3. We have previously assigned, sold, or transferred the servicing of mortgage loans
   .
   This is our record of transferring the servicing of mortgage loans we have made in:
   

   Year	Percentage of Loans Transferred
   2004	0%
   2005	0%
   2006	0%

This information does does not include assignments, sales or transfers to affiliates or subsidiaries.

APPRAISAL DISCLOSURE

You have the right to a copy of the appraisal report obtained in connection with your application for credit provided that, if required, you have paid for or are willing to pay for the appraisal. You can get a copy of this report by writing to us at the address listed below. We must hear from you no later than 90 days after you are notified about the action taken on your credit application. (If you withdraw your application, you must make your request for an appraisal report within 90 days of the withdrawal.) You can telephone us, instead of writing, but by doing so you are not assured of preserving your rights.

Contact Us:

Kinderhook Bank
Attn: Loan Department
One Hudson Street
Kinderhook , NY 12106 

Phone: 518.758.7101
Toll free: 1.888.747.8138