Since the 1003 and GFE only reflect a single payment, how is an Option ARM properly setup on these forms? An Option ARM has different payment options, I’m just very confused on how this would be reflected on these forms.
Any help or samples would be highly appreciated!
When I put one through WaMu about 5 months ago, they made me use 4.25% amortized for 30 years on the 1003. At that time, that is what they used to determine DTI. I am not sure if it has changed since the rates have been going up.
You should always put the note rate on the 1003/GFE. The note rate on most Option ARMS is the start rate with the fully amortized minimum payment reflected as the payment amount. The other options are alloed for in the Note but the actual note rate and payment is the start rate and thus should be the one reflected ont he 1003/GFE.
Are you sure it’s just the start rate? The AE at World Savings told me it is the Index + Margin that I put as the Note Rate on the 1003 because the qualification is based on that amount, not the minimum payment amount.
If the AE specifically told you to put in in a certain way then do it the way they want but the standard format is to enter it at the start rate and then you put the index and margin on the TIL page and click the neg am allowed.
I don’t see the “allow neg am” checkbox on the TIL form. Where’s that?