Which information is required on the Adjustable-Rate Mortgage ARM disclosure?

The Adjustable-Rate Mortgage (ARM) disclosure is specifically designed to inform borrowers about the key features and potential risks associated with adjustable-rate loans. The correct answer highlights essential elements that a borrower needs to know: the type of program being offered, any interest rate caps that limit how much the rate can increase, the margin that influences the interest rate calculation, and the index to which the loan is tied. This information is critical because it helps borrowers understand how their payments may change over time based on market conditions.

Understanding the type of program ensures the borrower knows what kind of adjustable-rate product they are considering, while the caps provide reassurance that there are limits on how high the interest rate can rise. The margin is the lender's profit added to the index rate, and knowing it is essential for borrowers to predict future payment amounts. The index reflects the economic factors that can cause rate fluctuations.

The other options, while they contain important information in different contexts, do not pertain to the specific elements required in the ARM disclosure. Credit scores and income relate more to loan approval criteria, while the loan-to-value ratio and down payment are crucial for determining the risk associated with a mortgage but are not part of ARM disclosures. Closing costs and savings options might be relevant financial