ADJUSTABLE RATE MORTGAGE LOAN PROGRAM DISCLOSURE
Five Year Interest Rate Swap Index - Non-Convertible - FHLMC
This disclosure describes the features of an Adjustable Rate Mortgage (ARM) program you are considering. Information on other ARM programs
available from your lender will be provided upon request.
HOW YOUR INTEREST RATE AND PAYMENT ARE DETERMINED:
• Your interest rate will be based on an index rate plus a margin. Please ask us for our curre nt interest rate and margin.
• Your initial interest rate will also reflect a discount. Please ask us about our current rate discount.
• The “Index” is the weekly average yield on the Five Year Interest Rate Swap as made available by the Federal Reserve Board.
• Your interest rate will equal the index rate plus our margin rounded to the nearest 1/8 percent, unless your interest rate “caps” limit the amount
of change in the interest rate.
• Your payment will be based on the interest rate, loan balance, and remaining loan term.
HOW YOUR INTEREST RATE CAN CHANGE:
• Your interest rate will remain fixed for the first 5 years, and may change every 5 years thereafter to the index value plus the margin, subject to the
• Your interest rate will be rounded to the nearest 1/8 percent.
• Your interest rate cannot increase or decrease more than 2.000% per adjustment.
• On a 360-month loan, your interest rate cannot increase by more than 10.000% over the term of the loan. On a 180-month loan, your interest
rate cannot increase by more than 4.000% over the term of the loan.
HOW YOUR PAYMENT CAN CHANGE:
• Your payment can change with each interest rate change.
• For example, on a new $10,000, 360-month loan with an initial interest rate of 6.500% and an initial index rate of 5.44 (the actual index rate as
of 3/26/02), the maximum amount that the interest rate could rise under this program is 10.000% to 16.500%. The payment amount could rise
from a beginning payment of $63.21 to a maximum of $109.24 in the twenty-fifth year.
• To estimate your monthly payment on