Jessica took a 3/1 ARM for 30 years with monthly payments. Her teaser rate was 4.5%, and the interest rate is indexed to 1 year CMT rate with a 2.5% margin. At the beginning of year 4 of her mortgage, the 1 year CMT is 2%. At the time of the first reset Jessica's payment will ________________.

1. Increase

2. Stay the same

3. Decrease

4. Impossible to determine