Loan Officer Gustan Cho
Loan OfficerForum Replies Created
-
-
Matt has obtained a 30-year 3/1 ARM mortgage loan for $150,000 on a beautiful four-bedroom two bath home in the suburbs. The start rate was 3%. The rate caps are 4/2/8. The margin is 3%. The index was 4% at the start of the loan, 4.25% at the end of year three, and 6.5% at year four. Which of the following rates would reflect the interest rate beginning in year five?
The right answer to this question is 9 percent is the rate at the start of year five. At the end of year three , the rate calculation gives us a 7.25% (3% margin + 4.25 index is 7.25%). but because of the 4 point cap on the first adjustment, the allowable rate was 7% (3% rate + 4 rate cap equals 7%: At year 4, the most it can go up i9s 2% so the maximum would be 9%, even though3% margin + 6.5% index=9.5% rate. Items that do not apply: 30-year $150,000 Beautiful 4 Bedroom, 2 bathroom, 4% Start INDEX. YOU NEED TO KNOW THE START RATE: YOU HAVE TO FIGURE YEAR 4 BEFORE YOU CAN FIGURE YEAR FIVE TO KNOW THE MAX RATE CAN INCREASE EACH YEAR.
-
Here is another question on the UTAH PLM EXAM that keeps on popping up: Where would a “due on sale clause” be found on the mortgage loan documents and what does it mean to the consumer?
Here is the answer:
-
I have taken the UTAH PLM EXAM five times and am scheduled to take it the sixth time this Monday, July 31st, 2023. I have not studied for the exam but will study for it tomorrow and Sunday. Two days. Here is one of the questions they ask often, and I did not know, so I just guessed every time. I asked Angie Torres, our National Operations Director, about this question, and she gave me this answer.
4/2/8
The first number (4) – Initial Adjustment Cap
The second number (2)- Subsequent Adjustment Cap
The third number (8)- Max Lifetime adjustment cap
Here’s what this means:
Initial adjustment cap: The first number represents the maximum percentage points that your interest rate can increase by in the first year after your initial fixed period ends. For a 3/1 ARM with a 2/2/5 cap structure, your rate can’t adjust to more than two percentage points higher than your initial rate in the fourth year of your loan.
Subsequent adjustment cap: Your rate will adjust for the remainder of your loan every year thereafter. The second number represents the cap for these adjustments. With a 2/2/5 cap structure, your rate can only adjust a maximum of two percentage points.
Lifetime rate cap: This limits how high the rate can rise over the life of the loan. In the case of a 2/2/5 cap structure, the third number shows that your interest rate cannot increase more than five percentage points over the life of the loan.
-
This reply was modified 2 months ago by
Sapna Sharma.
-
This reply was modified 2 months ago by Sapna Sharma.
-
This reply was modified 2 months ago by
-
Dustin, I have never seen such huge depreciation like RVs. I was thinking of either renovating my current RVA like adding more slides or trading it in. Can you ask your friend about adding two or three more slides to my current RV with one slide?
-
Dustin, I can’t believe these rates. Might as well go non-QM loan.
-
Dustin, do you know of any wholesale lenders that will do 120 days of late payments in the past 12 months?
Full doc non-QM wholesale lender.
-
One of the places I like to visit. Once I get my motorhome tuned up, I like to travel to South Dakota.
-
Many beautiful spots in Minnesota, and it has reasonable home prices and lower cost of living. Of course, your got the bad spots like the ghettos and democrat-infested areas.
Social Media Links