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5 12 pts Adjustable Rate Mortage (ARM) Mechanics You have an Adjustable Rate Mortgage (ARM) with the following initial terms, adjusting annually: PMT Cap Principal
5 12 pts Adjustable Rate Mortage (ARM) Mechanics You have an Adjustable Rate Mortgage (ARM) with the following initial terms, adjusting annually: PMT Cap Principal $200,000 Initial Rate 3.25% Term (yr) 20 Index YR2 4.50% Margin 0.50% 5% Calculate payment and balances to fill out the table below: Interest Rate Uncapped PMT Interest- Only PMT Negative Amort. YR Beg. Balance Capped PMT Ending Balance 1 $200,000 3.25% n/a n/a n/a 2 5.00% Supporting calculations: 5 12 pts Adjustable Rate Mortage (ARM) Mechanics You have an Adjustable Rate Mortgage (ARM) with the following initial terms, adjusting annually: PMT Cap Principal $200,000 Initial Rate 3.25% Term (yr) 20 Index YR2 4.50% Margin 0.50% 5% Calculate payment and balances to fill out the table below: Interest Rate Uncapped PMT Interest- Only PMT Negative Amort. YR Beg. Balance Capped PMT Ending Balance 1 $200,000 3.25% n/a n/a n/a 2 5.00% Supporting calculations
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