Pre-Application FHA/VA 5-1 Adjustable Rate Mortgage Loan Disclosure Statement -Premium
(1-Year Treasury Index 5 Percent Lifetime Cap on Interest Rate Increases and Decreases 30 Year Term
M & T Bank
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 rate plus a margin.
§ Your payment will be based on the interest rate, loan balance, and loan term.
- Except for the initial interest rate, the interest rate will be based on the weekly average yield on United States Treasury securities adjusted to a constant maturity of 1 year as made available by the Federal Reserve Board (your index), plus our margin, and rounded to the nearest 1/8%. Ask us for our current interest rate and margin
- Information about the index rate is published in The Wall Street Journal.
§ Except for the initial interest rate, (which will be in effect for 5 years), your interest rate will equal the index rate plus our margin, rounded to the nearest 1/8%, unless your interest rate "caps" limit the amount of change in the interest rate.
§ Your initial interest rate is not based on the index used to make later adjustments. Ask us for the amount of the premium applicable to the ARM program you have selected.
How Your Interest Rate Can Change
§ Your interest rate can change yearly after the first change date.
§ The first change date will be no sooner than 60 months and no later than 66 months after the date the first monthly payment is
scheduled to be paid.
§ Your interest rate cannot increase or decrease more than 1 percentage point per year.
§ Your interest rate cannot increase or decrease more than 5 percentage points over the term of the loan
How Your Monthly Payment Can Change
§ Your monthly payment can increase or decrease substantially based on annual changes in the interest rate.
For example, on a $10,000, 30-year loan with an initial interest rate of 3.125 % in effect in June 2016, the maximum amount that the interest rate can rise under this program is 5.000 percentage points, to 8.125%, and the monthly payment can rise from a first-year payment of $42.84 to a maximum of $67.72 in the 10th year of the loan. To see what your payment is, divide your mortgage amount by $10,000; then multiply the monthly payment by that amount. (For example, the first-year monthly payment for a mortgage amount of $60,000 would be: $60,000 / $10,000 = 6; 6x $42.84 = 257.04.
§ You will be notified in writing at least 25, 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.
Acknowledgment. By signing below, I acknowledge receipt of a copy of this disclosure statement and the “Consumer Handbook On Adjustable Rate Mortgages” booklet.
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Signature of applicant Date
MT5026/Form 2412 203(k) Renovation FHA 5-1 LIBOR ARM Disclosure June 2016
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Signature of applicant Date