A borrower takes out a 30-year adjustable rate mortgage loan

for $300,000 with monthly payments. The first two years of the loan have a "teaser" rate of 2%, after that, the rate can rest with a 1% annual rate cap.

On the reset date, the composite rate is 3%. What would be the Year 3 monthly payment?

a. $1,255

b. $1,307

c. $1,211

d. $1,163

e. $1,119

A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a teaser rate of 4%, after that, the rate can reset with a 5% annual payment cap. On the reset date, the composite rate is 6%. What would the Year 3 monthly payment be?

a. $1,003 b. $1,067 c. $1,186

d. $955

please give me the correct answers