Pre-Application 5-1 Year Adjustable Rate Mortgage Loan ...



Pre-Application 10 Year Interest-Only Period; 5-1 Adjustable Rate Mortgage Loan Disclosure Statement (1-Year LIBOR Index 5 Percentage Point Lifetime Cap on Interest Rate Increases Premium)M & T BankThis disclosure describes the features of the Interest Only Period Adjustable Rate Mortgage (ARM) program you are considering. Information on other ARM programs is available upon request.How Your Interest Rate and Payment Are DeterminedYour interest rate will be based on an index rate plus a margin. For a period of ten years from the date of the first payment (the "Interest-Only Period"), your payments will consist of interest-only, based on the interest rate and loan balance. After the Interest-Only Period, your payments will consist of principal and interest, based on the interest rate, loan balance and the loan term.-Except for the initial interest rate, (which will be in effect for 5 years), the interest rate will be based on the average of the interbank offered rates for one year U.S. dollar-denominated deposits in the London market - "LIBOR" (your index), plus our margin, and rounded to the nearest 1/8%. Ask us for our current interest rate and margin.-Information about the index rate is published in The Wall Street Journal.Except for the initial interest rate, (which will be in effect for 5 years), your interest rate will equal the index rate plus our margin, rounded to the nearest 1/8%, unless your interest rate "caps" limit the amount of change in the interest rate.Your initial interest rate is not based on the index used to make later adjustments. Ask us for the amount of the premium applicable to the ARM program you have selected.How Your Interest Rate Can ChangeYour interest rate can change yearly after 5 years.Your interest rate can not increase or decrease more than 5 percentage points at the first interest rate change date.After that your interest rate cannot increase or decrease more than 2 percentage points per year.Your interest rate cannot increase more than 5 percentage points over the term of the loan.How Your Monthly Payment Can ChangeYour monthly payment can increase or decrease substantially based on annual changes in the interest rate. Your monthly payment will also change at the end of the Interest-Only Period.For example, on a $10,000, 30-year loan with an initial interest rate of 4.25% in effect in November 2012, the maximum amount that the interest rate can rise under this program is 5.000 percentage points, to 9.25%, and the monthly (interest-only) payment can rise from a first-year payment of $35.42 to $77.08 in the 6th year of the loan. * To see what your (interest-only) payment is , divide your mortgage amount by $10,000; then multiply the monthly payment by that amount. (For example, the first-year monthly (interest-only) payment for a mortgage amount of $60,000 would be: $60,000 / $10,000 = 6; 6x $35.42 = $212.52).*This maximum monthly (interest-only) payment does not represent the maximum monthly payment you could be required to make under the terms of this product. Beginning in the eleventh year of your loan (i.e. the 121st monthly payment), the maximum monthly payment (which will be comprised of principal and interest) could rise to $91.59. You will be notified in writing at least 25, but no more than 120 days before the due date of a payment at a new level. This notice will contain information about your interest rates, payment amount, and loan balance.Additional Information concerning Interest Only Period featureYour ARM has an Interest-Only feature. During the Interest-Only Period, your monthly payment will be comprised of interest only, calculated by applying your interest rate to the current principal amount of your loan (the “Interest-Only Payments”). No payments of principal are due during the Interest-Only Period. The Interest-Only Payments will not reduce the principal balance of your loan. Voluntary prepayments of principal can be made during the Interest-Only Period. If voluntary prepayments of principal are made during the Interest-Only Period, the Interest-Only Payment will be recalculated based on the then-current principal balance.After the Interest-Only Period, your monthly payments will be comprised of both principal and interest. These monthly principal and interest payments will be in an amount sufficient to fully amortize the unpaid principal balance of the Note over the then remaining term of the Note until you have paid all principal, interest, and any other charges that you may owe under the Note or the related Mortgage.Acknowledgment. By signing below, I acknowledge receipt of a copy of this disclosure statement and the “Consumer Handbook On Adjustable Rate Mortgages” booklet. ____________________________________________ Signature of applicantDate ____________________________________________ Signature of applicantDateIf the property securing your loan is located in the State of Pennsylvania, has an original principal balance of $217,873 or less, and contains two or fewer units please note: If a mortgage lender offers to give you a mortgage with a variable interest rate, you are entitled by law to also be offered a mortgage with an interest rate which will not change. By law, this fixed interest rate mortgage must be offered to you at reasonably competitive terms and rate. ................
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