150,000 mortgage 7/1 ARM – Question about the payment amount?
I refinanced my house for $ 150,000 with a 7/1 ARM. I already know the index plus margin will be used to determine the interest rate when it adjusts, but I have a question about the monthly payment amount when it adjusts. The note says the following:
“The Note Holder will determine the amount of the monthly 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 will be the new amount of my monthly payment.”
Am I right that the new monthly payment amount is based off whatever the balance on the loan is when it changes…..or is it based off the original $ 150,000?