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10 Cards in this Set
- Front
- Back
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WHAT DOES THE 5 IN ARM RATE CAP 4/2/5 MEAN? |
THE MAXIMUM INTEREST RATE PER THE PERIODIC CAP |
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RATE CAP DESCRIBED AS 5/2/6 MEANS THE INTEREST RATE CANNOT INCREASE MORE THAN |
5% AT THE FIRST ADJUSTMENT (RC) 2% FOR SUBSEQUENT ADJUSTMENT PERIODS 6% TOTAL OVER THE LIFE OF THE LOAN (RC) |
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WHAT IS THE FORMULA FOR THE MAXIMUM INTEREST RATE AT THE FIRST RATE CHANGE DATE? |
CURRENT INTEREST RATE + THE RATE CAP |
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WHAT IS THE FORMULA TO CALCULATE THE FULLY INDEXED RATE? |
CURRENT INDEX + THE MARGIN |
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ALWAYS USE THE _________ OF THE FULLY INDEXED RATE FOR CALCULATION. |
LESSER |
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WHAT IS A HYBRID ARM? |
AN ARM WITH AN INITIAL FIXED RATE PERIOD GREATER THAN ONE YEAR. FOR EXAMPLE: 3/1, 5/1, 7/1 OR 10/1 ARMS. |
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WHAT IS A CONVERSION OPTION? |
CO ALLOWS THE BORROWER TO CONVERT FROM AN ARM LOAN TO A FIXED RATE LOAN |
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A FANNIE MAE CONVERTIBLE ARM PROGRAM MAY BE CONVERTED BETWEEN THE ___ AND ___ MONTH FOR A SMALL PROCESSING FEE PAID TO THE LENDER IN WHAT % AMOUNT? |
BETWEEN THE 13TH & 60TH MONTH AND 1% OF LOAN AMOUNT IS A TYPICAL REQUIRED CONVERSION FEE |
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AS IMPLEMENTED BY THE CFPB (CONSUMER FINANCIAL PROTECTION BUREAU) A LOAN SERVICER MUST PROVIDE A BORROWER WITH AN ARM WITH AT LEAST __ DAYS NOTICE BEFORE INTEREST RATE CHANGES |
60 DAYS NOTICE WITH NEW RATE ESTIMATE AND ESTIMATED PAYMENT AMOUNT |
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THE INITIAL INTEREST RATE CHANGE DISCLOSURE MUST BE GIVEN TO THE BORROWER ___ TO ___ MONTHS BEFORE THE FIRST PAYMENT IS DUE AT THE NEW RATE |
7 TO 8 MONTHS |
