Navigation:  Loan Screens > Account Information Screen Group > ARM Information Screen > ARM Detail tab > Lifetime Rates field group > Start Rate Below the Minimum Rate

Entry: User, checkbox

F/M: Yes

Mnemonic: LNRSBM

Screen: Loans > Account Information > ARM Information > ARM Detail tab

 

This field is used in the calculation of the new accrual rate.

 

When this field is checked, as a new rate is calculated, if it is below the lifetime minimum rate, the newly calculated rate will be used. Once the new rate reaches the lifetime minimum, any future rate calculations will not allow the rate to go below the minimum rate.

 

Once the accrual rate becomes equal to or greater than the lifetime minimum, the Start Rate Below the Minimum Rate field automatically has the checkmark removed, and the rate is never allowed to go below the lifetime minimum again. (This is done with the payment.)

 

Example: The lifetime minimum rate on the loan is 8.000%. The original rate is 6.750%. Enter 8.000% in LNAMLO (lifetime minimum rate). Your original rate (LNAMOA) and accrual rate (LNAMRT) are 6.750% and the Start Rate Below the Minimum Rate field has a checkmark. As long as the accrual rate calculates less than 8.000%, it will remain below the lifetime minimum. Once the accrual rate becomes equal to or higher than 8.000%, any future rate changes will never be lower than 8.000%.

 

Note:  The same option/field is not available on the Loan Investor Fields screen. If you have an adjustable loan that is sold and use this field, the investor guaranteed rate will not go below the minimum.