Anna has a 3/1 15-year Hybrid Adjustable-Rate Loan that has a start rate of 3.25%. The Index (the 1 Year T-bill) is at 1.86% at the start of the loan and is at 3.50 at the end of 3 years, at the end of the 4^th year, the Index is at 4.25. The Margin is 2.50, and the caps are 5/2/6.

INDEX -

MARGIN -

FULLY INDEXED RATE -

INITITAL RATE

DISCOUNT AMOUNT -

INTITIAL ADJUSTMENT CAP -

PERIDODIC CAP -

LIFETIME CAP -

NEGATIVE AMORTIZATION -

What is the starting rate on the loan?

What is the rate at the first adjustment?

What is the fully indexed rate at the second adjustment?

What is the maximum Rate the borrower will pay over the 30 years?

If the rate reaches the maximum, what would the index value need to be?