Adjustable-Rate Mortgage

Certain restrictions apply. All loans subject to approval. Must be or become a Collins Community CU member to obtain a loan. Rates, terms and conditions subject to change at any time.

This is an example of a 5/1 Arm. Other arm options are available. Ask a Real Estate Load Officer for information

ARM DISCLOSURE

5/1 ARM

This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information on other ARM programs that the Lender offers is available upon request.

HOW YOUR INTEREST RATE AND PAYMENTS ARE DETERMINED

• Your interest rate will be based on an index plus a margin.
• Your payment will be based on the interest rate, loan balance, and loan term.
• The interest rate will be based on the index plus our margin. The index is the weekly average yield on United States Treasury Securities adjusted to a constant maturity of 1 year(s). Ask us for our current interest rate and margin.
• Information about the index is published in the Federal Reserve Statistical Release (H.15).
• Your initial interest rate is not based on the index used to make later adjustments. Ask us for the current amount of our adjustable rate mortgage discounts or premiums.
• Your regular monthly payments will consist of both principal and interest.

HOW YOUR INTEREST RATE CAN CHANGE

• Your interest rate will not change for the first SIXTY (60) months of your loan.
• After the first SIXTY (60) months, your interest rate and payment can change every TWELVE (12) months.
• Each date on which your interest rate can change is called a "Change Date" and will be described in your loan documents.
• On each Change Date, your interest rate will equal the index plus the margin, rounded up or down to the nearest 0.125%, unless your interest rate "caps" or "floors" (described below) limit the amount of change in the interest rate.
• Your interest rate cannot increase more than SIX percentage points (6.000%) above the initial interest rate over the term of the loan.
• Your interest rate cannot decrease below FOUR percentage points (4.000%) over the term of the loan.
• On the first Change Date, your interest rate cannot increase more than TWO percentage points (2.000%) above the initial interest rate.
• On the second Change Date and every Change Date thereafter, your interest rate cannot increase or decrease more than TWO percentage points (2.000%).

HOW YOUR PAYMENT CAN CHANGE

• Following the initial SIXTY (60) months of your loan, your monthly payment can increase or decrease substantially every TWELVE (12) months based on changes in the interest rate.

• Your new payment will be due beginning with the first payment due date after the Change Date on which the related interest rate change occurred, and will be your payment until the first payment due date after the next Change Date.
• For example, on a $10,000 30-year loan with an initial interest rate of 3.250% (based on the lowest rate possible, as dictated by your contract and less a discount of 0.75% plus a premium of %, rounded as provided above), the maximum amount that the interest rate can rise under this program is SIX percentage points (6.000%) to 9.250% and the monthly payment can rise from a first year payment of $43.52 to a maximum of $75.45 in the 8th year. To see what your monthly payments would be, divide your mortgage amount by $10,000; then multiply the monthly payment by the resulting amount. (For example, the monthly payment for a mortgage amount of $60,000 would be $60,000 divided by $10,000 = 6; 6 times $43.52 = $261.12 per month.)
• You will be notified at least 210, but no more than 240, days before the 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 the 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.

OTHER INFORMATION

• This obligation does not have a demand feature.