Star One Credit Union
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Adjustable Rate Mortgage ("ARM") Mobile Home - Early Disclosure Statement

STAR ONE CREDIT UNION
Adjustable Rate Mortgage Mobile Home Loan
Early Disclosure Statement
PRINCIPAL DWELLING ADJUSTABLE RATE LOAN

If you wish to apply, or if you have already applied, for an Adjustable Rate Loan (referred to in this Disclosure as an "ARL") with Star One Credit Union ("Credit Union"), you should read the information below concerning this mortgage loan program. This disclosure describes the features of the specific Adjustable Rate Mortgage ("ARM") loan program that you are considering. Information on other ARM programs available from us will be provided to you upon request.

The loan offered by the Credit Union is an Adjustable Rate Loan. The applicable interest rate will change from time-to-time based upon movements of an interest rate index. Your monthly payments may increase if the interest rate rises but will never decrease if the interest rate falls. Your payment will be based on the interest rate, loan balance, and loan term. Because future movements of the index are related to market conditions that cannot be predicted, it is impossible to know in advance how much you will have to pay, either each month or over the life of the loan. Interest rate changes and payment changes will be made according to certain rules that are explained below.

TERMS OF THE CREDIT UNION'S ADJUSTABLE RATE LOAN

The ARM offered by the Credit Union is based on the terms and conditions set forth in the disclosure statement and in the promissory note. The interest rate, index and margin values, and any applicable fees listed herein are based upon examples of recent rates and terms used by the Credit Union. We suggest that you inquire about our current interest rates, discount, index and margin values.

INTEREST RATE INDEX

The interest rate charged on this mortgage loan will be based on an interest rate index ("index") plus a margin. The index is:

The average auction high rate on 26 week Treasury Bills for the 13 weeks preceding the first day of the months of March, June, September, and December, rounded to the nearest quarter of a percent.

Information about the index is published in the Public Debt News release issued by the Department of the Treasury. If the index ceases to be made available by the publisher, we will choose a new index which is based upon comparable information.

FREQUENCY OF ADJUSTMENTS

The applicable interest rate under this ARL loan will be reviewed and may be adjusted quarterly. The amount of the payment may be adjusted annually. Your interest rate and, or, monthly payment may be adjusted at those times specified above, based upon movements of the index.

INTEREST RATE AND PAYMENT ADJUSTMENTS

The initial interest rate offered by the Credit Union and the initial index value on this loan will be specified either at the time you receive a loan rate commitment or at the loan closing, and will be based upon market conditions at that time. Your payment is based on the amount necessary to fully amortize the remaining loan balance at the applicable interest rate over the remaining loan term. Your monthly payments may increase if the interest rate rises, but will never decrease if the interest rate falls. However, should any of your payments not be sufficient to cover the interest due, the difference will be added to your loan amount. The amount that your interest rate and payment may change will also be affected by the lifetime interest rate limits which are discussed below.

LIMITATIONS ON INTEREST RATE AND PAYMENT CHANGES

Your interest rate cannot increase more the five (5) percentage points over the life of the loan and has a lifetime floor of six (6) percentage points.

HOW YOUR PAYMENT CAN CHANGE

Your monthly payment will change yearly based on the changes in the interest rate. For example, on a $10,000.00, 15 year loan with an initial rate of 10.000% (the initial rate as of January 2007), the maximum amount that the interest rate can rise under this program is five (5) percentage points to 15.000%; and the monthly payment can rise from a first-year payment of $107.51 to a maximum of $138.45 in the thirteenth month.

To see what your payment would be, divide your mortgage amount by $10,000.00, then multiply the monthly payment by that amount. (For example, the monthly payment for a mortgage amount of $60,000.00 would be $60,000.00 divided by $10,000.00 = 6; 6 x $107.51 = $645.06.

ADJUSTMENT NOTICES

The Credit Union will notify you at least quarterly if interest rate changes occur. When an interest rate change also will involve a change in your monthly payment, the Credit Union will notify you in writing (at least 25 calendar days, but not more than 120 calendar days) before the payment at the new level is due. The notice will indicate the adjusted payment amount, interest rate, index value, and the outstanding loan balance at that time.

CHANGE DATES

Each new interest rate will become effective on the next change date. When your monthly payment changes as a result of a change in the interest rate, your monthly payment will change as of the first monthly payment due date after the change date.

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