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 at least 210, but no more than
240, days before first payment at the adjusted level is due after
the initial interest rate adjustment of the loan. This notice will
contain information about the adjustment, including the interest rate,
payment amount, and loan balance.]
- [You will be notified at least 60, but no more than
120, days before first payment at the adjusted level is due after
any interest rate adjustment resulting in a corresponding payment
change. This notice will contain information about the adjustment,
including the interest rate, 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:
Example
| 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 |
|
|
|
|
|
Note:
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 1982 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.] |
