A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a "teaser" rate of 4 percent, after that the rate can reset with a 2 percent annual rate cap. On the reset date, the composite rate is 5 percent. What would the Year 3 monthly payment be? Multiple Choice $1,071 $1,067

A borrower takes out a 30 -year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a "teaser" rate of 4 percent, after that the rate can reset with a 2 percent annival rate cap. On the reset date, the composite rate is 5 percent. What would the Year 3 monthly payment be? Multiple Choice $1,071 $1,067