3 Year Adjustable Rate Mortgage Disclosure
This disclosure describes the features of the Adjustable Rate Mortgage (ARM)
program you are considering. Information on other ARM programs is available upon
request.
- This loan program has an adjustable rate feature. This means that your interest
rate and payment amount can change.
HOW YOUR INTEREST RATE AND PAYMENT RATE ARE DETERMINED
- Your interest rate will be based on an index plus a margin, rounded to the
nearest .001 percent.
- Your monthly payment will be based on the interest rate, loan balance, and
remaining loan term.
- Your payment will be rounded to the nearest $0.01.
- The interest rate will be based on the weekly average yield on United States
Treasury securities adjusted to a constant maturity of three years (3 Year Treasury
Index) plus our margin rounded to the nearest .001 percent. Ask us for our current
interest rate and margin.
- Information about the index is published weekly in the Wall Street Journal.
- The initial interest rate is not based on the index used to make later adjustments.
Ask us for the amount of the current interest rate premium.
- Your interest rate will equal the index rate plus margin, rounded to the nearest
.001 percent, unless your interest rate "caps" limit the amount of change
in the interest rate.
HOW YOUR INTEREST RATE CAN CHANGE
- Your interest rate can change every 36 months after remaining fixed for 60
months.
- Your interest rate cannot increase or decrease more than 2.000 percentage
point(s) at each adjustment.
- Your interest rate cannot increase more than 6.000 percentage point(s) above
the initial interest rate over the term of the loan.
- Your interest rate will never be less than 6.500 percent.
HOW YOUR PAYMENT CAN CHANGE
- Your payment can change every 36 payment(s) based on changes in the interest
rate after remaining fixed for 60 payment(s).
- Your monthly payment may increase or decrease substantially based on changes
in the interest rate.
- You will be notified in writing at least 25 days but no more than 120 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.
- For example, on a $10,000 30-year loan with an initial interest rate of 9.280
in effect in March 2005, the maximum amount that the interest rate can rise under
this program is 6.000 percentage point(s), to 15.280 percent, and the monthly
payment can rise from an initial payment of $82.48 to a maximum of $122.70 in
the 133rd month (11 years, 1 month). To see what your payments would be, divide
your mortgage amount by $10,000; then multiply the monthlypayment by that amount
(for example, the monthly payment for a mortgage amount of $60,000 would be: $60,000
/ $10,000 = 6; 6 x $82.48 = $494.88 per month).
OTHER FEATURES OF THIS ARM PROGRAM
- This ARM program contains a demand provision.
EXAMPLE
The example below shows how your payments would have changed under this ARM
program based on actual changes in the index from 1991 to 2005. This does not
necessarily indicate how your index will change in the future.
The example is based on the following assumptions:
| |
Amount of loan: |
$10,000.00 |
| |
Term: |
30 years |
| |
Payment Adjustment: |
Every 36 payment(s) after remaining fixed for 60 payment(s) |
| |
Interest Adjustment: |
Every 36 months after remaining fixed for 60 months |
| |
Margin*: |
2.000 percentage point(s) |
| |
Caps |
|
| |
- Periodic Interest Rate
(increases or decreases):
|
2.000 percentage point(s) at each adjustment |
| |
- Lifetime Interest Rate
(increases):
|
6.000 percentage point(s) above the initial interest rate |
| |
- Lifetime Interest Rate
(floor):
|
Interest rate will never be less than 6.500 percent |
| |
Interest Rate Premium (**): |
3.53 percentage point(s) |
| |
Index: |
The weekly average yield on United States Treasury securities
adjusted to a constant maturity of three years |
|
Year
(As of the first week ending in March)
|
Index
(%)
|
Margin
(%)
|
Interest Rate
(%)
|
Monthly Payment
($)
|
Remaining Balance
($)
|
|
1991
|
7.270
|
2.000
|
12.800 (L)
|
109.06
|
9,969.54
|
|
1992
|
6.000
|
2.000
|
12.800
|
109.06
|
9,934.92
|
|
1993
|
4.280
|
2.000
|
12.800
|
109.06
|
9,895.61
|
|
1994
|
5.190
|
2.000
|
12.800
|
109.06
|
9,850.96
|
|
1995
|
6.950
|
2.000
|
12.800
|
109.06
|
9,800.25
|
|
1996
|
5.440
|
2.000
|
10.800 (C)
|
94.64
|
9,719.07
|
|
1997
|
6.270
|
2.000
|
10.800
|
94.64
|
9,628.67
|
|
1998
|
5.620
|
2.000
|
10.800
|
94.64
|
9,528.00
|
|
1999
|
5.250
|
2.000
|
8.800 (C)
|
81.75
|
9,379.57
|
|
2000
|
6.550
|
2.000
|
8.800
|
81.75
|
9,217.53
|
|
2001
|
4.510
|
2.000
|
8.800
|
81.75
|
9,040.65
|
|
2002
|
3.610
|
2.000
|
6.800 (C)
|
70.73
|
8,799.22
|
|
2003
|
1.840
|
2.000
|
6.800
|
70.73
|
8,540.85
|
|
2004
|
2.160
|
2.000
|
6.800
|
70.73
|
8,264.37
|
|
2005
|
3.750
|
2.000
|
6.500 (K)
|
69.34
|
7,960.53
|
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 2005 the monthly payment for a mortgage amount of $60,000 taken out in 1991
would be: $60,000 / $10,000 = 6; 6 x $69.34 = $416.04 per month).
* This is a margin we have used recently; your margin may be different.
** This is the amount of a premium that we have provided recently; your loan may
have a different premium amount.
(C) This rate reflects a 2.000 percentage point periodic cap on decreases.
(K) This reflects a lifetime floor of 6.500 percent.
(L) This interest rate reflects a 3.53 percentage point premium.
This is not a commitment to make a loan.
You hereby acknowledge receipt of this ARM Program Disclosure and a copy of the
Consumer Handbook on Adjustable Rate Mortgages on today's date.
|
