This disclosure describes the
features of the adjustable-rate mortgage (ARM) program you are considering.
Information on other ARM programs is available upon request.
How Your Interest Rate and Payment Are Determined
- Your interest rate will be based on [an index plus
a margin] [a formula].
- Your payment will be based on the interest rate, loan
balance, and loan term.
- [The interest rate will be based on (identification
of index) plus our margin. Ask for our current interest rate and margin.]
- [The interest rate will be based on (identification
of formula). Ask us for our current interest rate.]
- Information about the index [formula for rate adjustments]
is published [can be found]
.
- [The initial interest rate is not based on the (index)
(formula) used to make later adjustments. Ask us for the amount of
current interest-rate discounts.]
How Your Interest Rate Can
Change
- Your interest rate can change (frequency).
- [Your interest rate cannot increase or decrease more
than
percentage points at each adjustment.]
- Your interest rate cannot increase [or decrease] more
than
percentage points over the term of the loan.
How Your Payment Can Change
- Your payment can change (frequency) based on changes
in the interest rate.
- [Your payment cannot increase more than (amount or
percentage) at each adjustment.]
- You will be notified in writing
days before
the due date of a payment at a new level. This notice will contain
information about your interest rates, payment amount, and loan balance.
- [You will be notified once each year during which
interest-rate adjustments, but no payment adjustments, have been made
to your loan. This notice will contain information about your interest
rates, payment amount, and loan balance.]
- For example, on a $10,000 [term] loan with an initial
interest rate of
[(the rate shown in the interest-rate
column below for the year 19
)] [in effect (month) (year)],
the maximum amount that the interest rate can rise under this program
is
percentage points, to
%, and the monthly payment
can rise from a first-year payment of $
to a maximum
of $
in the
year. To see what your payments would
be, divide your mortgage amount by $10,000; then multiply the monthly
payment by that amount. (For example, the monthly payment for a mortgage
amount of $60,000 would be: $60,000 ÷ $10,000 = 6; 6 ×
= $
per month.)]
[Example The example below shows how your payments would have changed
under this ARM program based on actual changes in the index from 1982
to 1996. This does not necessarily indicate how your index will change
in the future.
The example is based on the following assumptions:
Payments would
have changed under this ARM program based on actual changes in the
index from 1982 to 1996
| Amount
|
$10,000 |
Caps
|
[periodic interest-rate
cap] |
| Term
|
|
|
lifetime interest-rate
cap |
| Change date
|
|
|
[payment cap] |
| Payment adjustment
|
(frequency) |
[Interest-rate carryover] |
| Interest adjustment
|
(frequency) |
[Negative amortization] |
| [Margin]*
|
|
[Interest-rate discount]** |
| |
|
Index
|
(identification of index
or formula) |
Payments would
have changed under this ARM program based on actual changes in the
index from 1982 to 1996
| Year |
Index
(%) |
Margin
(percentage points) |
Interest Rate
(%) |
Monthly Payment
($) |
Remaining Balance
($) |
| 1982 |
|
|
|
|
|
| 1983 |
|
|
|
|
|
| 1984 |
|
|
|
|
|
| 1985 |
|
|
|
|
|
| 1986 |
|
|
|
|
|
| 1987 |
|
|
|
|
|
| 1988 |
|
|
|
|
|
| 1989 |
|
|
|
|
|
| 1990 |
|
|
|
|
|
| 1991 |
|
|
|
|
|
| 1992 |
|
|
|
|
|
| 1993 |
|
|
|
|
|
| 1994 |
|
|
|
|
|
| 1995 |
|
|
|
|
|
| 1996 |
|
|
|
|
|
To see what your payments would have been
during that period, divide your mortgage amount by $10,000; then multiply
the monthly payment by that amount. (For example, in 1996 the monthly
payment for a mortgage amount of $60,000 taken out in 1992 would be:
$60,000 ÷ $10,000 = 6; 6 ×
= $
per month.) |
* This is a margin we have used recently, your margin may be different.
** This is the amount of a
discount we have provided recently; your loan may be discounted by
a different amount. |
