When an adjustable rate loan (ARM) reaches the Adjustment Date (Field 54), which rate in the Interest Index Table is used to determine the new payment?

Answer

The date in Next Interest Adjustment Date (Field 54) determines when the adjustment will take place. The number of days in Interest Notice (Field 61) is the number of days before the date in Field 54 that the system will look at the rate in the Interest Index Table. The rate in the table on that date will be used to determine the new interest rate. If no rate is found for that exact date, the program will use the last rate entered prior to that date. The number of days in Interest Notice (Field 61) is also the number of days prior to the change taking effect that the change notice letter can be printed.