Stmt on Page 3 of HUD-1. "Even if you make pmts on time, can your mo. amt. owed for P&I and Mtg Ins. rise?" Iam having trouble with this. Rate is fixed for 5 years and then can adjust every 5 years, however, the initial rate is fully indexed. So do I add the annual cap to the intial rate to calculate the first pmt. For example initial rate is 6.50%+2.00% = 8.50% and keep adding 2% to each rate (8.50 + 2.00%= 10.50%) until I reach the lifetime cap? Can anyone help me with this? Thanks.
(The TIL shows one payment stream which is more than the fully indexed rate)