All my questions are in bold:
I'm setting up our TRID forms for a single disclosure Construction to Perm. Here are the loan specs:
Fixed Interest only for 1 year
Rate: Prime + margin (note: this rate will set prior to consummation! This will not be a discount/premium variable rate loan)
5/1 ARM 2/2/5 Cap
Initial rate: fixed number
Adjustments 12 mo LIBOR + margin
Firstly, I'm not even sure if I have an "adjustable rate" or a "step rate" - I believe I have an adjustable rate.
So assuming I do have an adjustable rate loan, for APR and TIP, I'm spinning my wheels on how to base my calculations in 1026.17(c)1's commentaries. I'm not sure whether I am in a commentary #8 or commentary #10 situation.
In commentary 8, is this how I calculate APR: Calculate the initial rate for the construction period with the fixed construction rate, then at year 2, do I then adjust my rate to the ARM's initial fixed rate? And do I then adjust to the fully indexed rate thereafter?
What about TIP though. Is it computed on the exact same bases as APR?
What about Finance Charges and Total of Payments on the CD? - Is it the same bases as how APR and TIP is computed?
Am I correct that I don't fall under Commentary 10 scenario? However, I don't believe I have a discount/premium situation b/c my interest rate at construction is determined before consummation AND my initial fixed ARM rate is known at consummation and will not change at anytime through out origination or the loan.