Form 3108 - Adjustable Rate Rider (1 Year Treasury Index -- Rate Caps)

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ADJUSTABLE RATE RIDER
(1 Year Treasury Index -- Rate Caps)
THIS ADJUSTABLE RATE RIDER is made this __________ day of ____________________, _______, and is
incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the “Security
Instrument”) of the same date given by the undersigned (the “Borrower”) to secure Borrower’s Adjustable Rate Note (the “Note”)
to ____________________________________________________________________________________________ (the
“Lender”) of the same date and covering the property described in the Security Instrument and located at:
____________________________________________________________________________________________________
[Property Address]
THE NOTE CONTAINS PROVISIONS ALLOWING FOR CHANGES IN THE
INTEREST RATE AND THE MONTHLY PAYMENT. THE NOTE LIMITS THE
AMOUNT THE BORROWER’S INTEREST RATE CAN CHANGE AT ANY ONE
TIME AND THE MINIMUM AND MAXIMUM RATES THE BORROWER MUST
PAY.
ADDITIONAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower
and Lender further covenant and agree as follows:
A. INTEREST RATE AND MONTHLY PAYMENT CHANGES
The Note provides for an initial interest rate of __________%. The Note provides for changes in the interest
rate and the monthly payments as follows:
4. INTEREST RATE AND MONTHLY PAYMENT CHANGES
(A) Change Dates
The interest rate I will pay may change on the first day of _____________________, _______, and on
that day every 12th month thereafter. Each date on which my interest rate could change is called a “Change
Date.”
(B) The Index
Beginning with the first Change Date, my interest rate will be based on an Index. The “Index” is the
weekly average yield on United States Treasury securities adjusted to a constant maturity of one year, as made
available by the Federal Reserve Board. The most recent Index value available as of the date 45 days before
each Change Date is called the “Current Index,” provided that if the Current Index is less than zero, then the
Current Index will be deemed to be zero for purposes of calculating my interest rate.
If the Index is no longer available, the Note Holder will choose a new index which is based upon
comparable information. The Note Holder will give me notice of this choice.
(C) Calculation of Changes
Before each Change Date, the Note Holder will calculate my new interest rate by adding
_________________ percentage points (the “Margin”) (__________%) to the Current Index. The Note Holder
will then round the result of this addition to the nearest one-eighth of one percentage point (0.125%). Subject to
the limits stated in Section 4(D) below, this rounded amount will be my new interest rate until the next Change
Date.
The Note Holder will then determine the amount of the monthly payment that would be sufficient to
repay the unpaid principal that I am expected to owe at the Change Date in full on the maturity date at my new
interest rate in substantially equal payments. The result of this calculation will be the new amount of my
monthly payment.
(D) Limits on Interest Rate Changes
The interest rate I am required to pay at the first Change Date will not be greater than__________% or
less than __________%. Thereafter, my interest rate will never be increased or decreased on any single Change
Date by more than one percentage point (1.0%) from the rate of interest I have been paying for the preceding 12
months. My interest rate will never be greater than __________% or less than the Margin.
(E) Effective Date of Changes
My new interest rate will become effective on each Change Date. I will pay the amount of my new
MULTISTATE ADJUSTABLE RATE RIDER--ARM 5-1--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT
Form 3108 1/01 (rev. 6/16) (Page 1 of 2)

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