The Initial Arm Disclosure contains information about the terms of the adjustable loan that the borrower is considering. This form explains to the borrower how the interest rate is calculated and adjusted, how the payments are determined, and how the payments can change over the life of the loan.
The Initial ARM Disclosure can be accessed by selecting Forms > ARM Disclosure (Initial), from the menu bar.
Complete the How your Interest Rate is Determined section:
- Select the Index Base from the dropdown list, or enter it manually.
- Enter the location where the borrower can find additional information about how indexes are calculated in the Information about the Index is available at/infield.
- Indicate how the interest rate was determined by selecting the applicable Your interest rate is based on check box and completing the corresponding field.
- Select the Initial Interest Rate Discount and Interest Rate Changes are Subject to the lender's discretion check boxes, if applicable to the loan.
- If the initial loan payments are interest only, enter the number of months in the Interest Only mths field.
Complete the Rate Adjustments and/or Payment Adjustments section, if applicable
If this information was entered in the Truth-in-Lending screen, it is automatically populated. If this information is entered or changed in the ARM Disclosure (Initial) screen, the Truth-in-Lending screen is automatically populated.