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INTEREST RATE LIM~TS
CONVERSION OPTIONS
T}{~~ ADJI"~"TAI3LE: RA7'H: ttlDE:ft is made this 25TH ~ay o~ January 199Q
and is incorporated into and shall be det~med to amend and supplement the M~~rtga~;e, Deed of 7Yust, or tiecurity
E~eed, (the `Security Instrument") of the same date ~i~~~n by the undersi~ned (the "F3orroH~er") to secure
E~rrower's Ac~justahle ftate tiote ( the 'tiote") to }iARBOR FEDERAL tiAV1nGti AND LOAti A~.~O('IAT10N ( the
"Lender") of the same date and co~~erinK the property described in the Security~ lnstrument and located at:
FOX[~ORTH AVENCE, PORT ST LUCIS, FL. 34983
( F'roperty Addre~.s )
The Note contains p~ovistons aliowing for changes in the interest rate. N the
interest rate increases, 4he Borrower's monthly payments wili be htgher. If the
interest rate decreases, the Borrower's monthly payments wlll be lowe~.
ADDITIONAL COVENAIv'TS. In addition to the co~~enant and agreements made in the ~ecurit~~
Instrument, Borrower and Lender further covenant and agree as follows:
A. INTEREST RATE AND MONTHLY PAYMENT CHANGES
The hote provedes for an initial interest rate of 8.125 Section 4 of the Note prn~~des for chan~es
in the interest rate and the monihly paS~rnents, as follows:
4. [tiTERES'T RATE AND biOIvTHLY PAl'bSEh~ CHANGES
(A) Change Dates
The interest rate I will pay may change on the first dayof February .19 91 , and on tfiat day
of the month every TWELVF, months thereafter. Each date on which my interest rate could change is called a
"Change Date".
(B) 'R~e Ir+dex
Beginning with the first Change Uate, my interest rate will be based on an "[ndex". The Index is the weekly
average yield on United States Treasury securities adjusted to a constant macurity of ONE y~ars, as made
ava.ilable by the Federa! Reserve Board. 'I~e most recent lndex figure avaiiable as of 45 days before each Change
Date is called the "Current Index".
If the Index is no longer a~~ailable, the ?~'ote Holder wilt choose a new Index which ishased upon comparabte
information. The Note Holder w~ll give me notice of its choice.
(C) Calculation of Changes
Before each Change Date, the tiote Holder will calculate my new interest rate by adding Tt~O A2dD 750/1000
percentage points ( 2. 750 to the Current Index. 'It~e Note Holder will then round the result of this
addition to the nearest one-eighth o[one percentage point (0.125~,). Subject to the limits scated in Section 4(D)
below, this rounded amount w~ll be my new interest rate until the next C;hange Date.
'It~e Note Holder will then detecmine the amount of the montly 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 plus any required monthly escrow for taxes
i and insurance will be the new amount of m~• monthly payment.
! (D) Ifmits on Intereet Rate Changes
E The rate of interest I am required to~pay shaU ne~•er be increased or decreased on anysingle Change Date by
4 more than T~o percentage points ( 2, p00 from the rate of interest I have
; been paS~ng for [he preceedin~ TWELVE months. My interest rate also shall never increase more
than SIX perceniaKe ~intti ( 6.000 from the interest rate
s establi.shed in paragraph A of this inst rument. My intc~rest ratc~ shail ne~~e~r d~~rc~ase helow the interest rate estab-
; lished in para~raph A c~f this instrumPnt.
~
~ (E) Effective Date of Changea
~ My new interest rate will become effective on each Change Date. [ will pay the amount of my neH~ monthly
payment beginning on the first monthly payment date after the Change Date until the amount of my monthty
~ payment changes again.
~ (F) Notice of Changes
~ The Note Holder will mail or deliver to me a notice before each Change Date. The notice will advise me of:
E (i) the new interest rate on my loan a.ti ~~f the Change D~te:
~ (ii) the amount of my monthiy payment following the Change Date;
° (iu) Any additional matters which the 1~'ote Holder is requirec~ to disclose; and
~ (i~•j the titte and telephone number of a person who will answes any question I may have regarding the
~
A notice.
(G) Option To Convert AML To F'exed Interest Rate
Beginning of the first change date the borrower shall ha~~e the option of com~erting the Adjustable
inierest rate to a fixed interest rate. The fee for exerrisinq the optian to convert to a fixed interest rate shall hc~
tw~o hundred fifty dollars (g2~0.00). This option shall remain a~•ailable until:
(1) the borrower exercises the option or
(2) the expiration of the ~ption on the fifth chanKe date.
The fixed interest rate available to the borr~wer shall be calculated by adding one half of one percentage p~int
s (.:~0) to the Federal Home Loan Mortga~e Corporati~n's (FHI~MC) Required Net Yield for 60 day delivery of
k 3Q ~-r. fixed rate mortgages and rounding the sum to the next hi~hest one-eighth of one perceniaKe point
~ (.12 The interest rate will be established u~n receipt of borrowers written notice of intent to exercise the
~ opti~~n t~~ convert. My new interest rate calculated under this Section 4(G) will not be greater than the maximum
~ rate st ated in Section 4( D) above. In order to exercise the opt i~n to convert to a fixed interest rate, the borrower
fi must n~~tify Narhor Federal in wri`in~ of his her intent t~ exerci5e the option in accordance with the
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