Poli Adjustable Rate Mortgage (ARM) Programs.

In addition to fixed rate mortgages, Poli Mortgage also offers Adjustable Rate Mortgage (ARM) programs. ARM loans are generally structured with a lower introductory interest rate that fluctuates over the life of the loan according to a set of terms identified in the loan agreement. ARM rate adjustments typically parallel the movement of a current index rate, such as treasury securities, LIBOR or the Cost of Funds Index. The ARM loan agreement often also sets a cap on how high or low the interest rate can fluctuate during specified adjustment periods, as well as over the life of the loan.

For example, on a 5/1 year ARM loan with caps of 2/2/5, your interest rate would have the following limitations:

• The initial cap -- a 2 in this example -- indicates the interest rate cannot be increased or decreased more than 2 percentage points at the end of the first term of the loan. In this case, that would be 5 years.
• The second 2 represents a cap on how much the interest rate can be adjusted up or down annually after the first interest rate adjustment.
• The final number in the sequence -- a 5 in this case -- is known as the lifetime cap. This variable limits the number of percentage points an interest rate can increase or decrease over the life of the loan. All ARM mortgages are required to have a lifetime cap.