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#2244864 - 10/30/20 02:31 PM ARM Program Disclosures - Interest Only & ARM
NoJustNo Offline
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If you have a product that is a 1 year interest only followed by a 7/1 ARM - would you need a program disclosure in addition to the "standard" 7/1 ARM? I would think so because the description of the program isn't going to be correct because the first change will be a year later than a standard 7/1 ARM. Right?

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#2244866 - 10/30/20 02:55 PM Re: ARM Program Disclosures - Interest Only & ARM NoJustNo
rlcarey Offline
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If it is just interest only and not construction - yes.
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#2244868 - 10/30/20 03:24 PM Re: ARM Program Disclosures - Interest Only & ARM NoJustNo
NoJustNo Offline
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Good deal - so you can just ignore the construction phase if under a year -- right?

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#2244869 - 10/30/20 03:27 PM Re: ARM Program Disclosures - Interest Only & ARM NoJustNo
NoJustNo Offline
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And... this is only for initial construction, right?

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#2244871 - 10/30/20 03:35 PM Re: ARM Program Disclosures - Interest Only & ARM NoJustNo
rlcarey Offline
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Correct - see comment 1 under 19(b) Certain Variable-Rate Transactions.

If you don't care whether or not you are making a Qualified Mortgage, there would be no prohibition in doing interest only for the first year on a permanent mortgage.
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#2244873 - 10/30/20 03:45 PM Re: ARM Program Disclosures - Interest Only & ARM NoJustNo
NoJustNo Offline
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Please pardon my "denseness" here -- the fact that the overall term of the combined transaction has no bearing, right? As long as the construction phase is one year or less - it can essentially be "excluded" from the ARM program disclosure?

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#2244875 - 10/30/20 03:57 PM Re: ARM Program Disclosures - Interest Only & ARM NoJustNo
rlcarey Offline
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rlcarey
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Galveston, TX
Yes
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