To calculate the payment on an ARM applied for under the general ATR rule, .43(c)(5)(i) states we must use the fully indexed rate (or any introductory rate and we are not discounting so that would not apply here). I think the commentary says we cannot take into consideration the rate adjustment caps, for example if we stipulate that the rate can not go up or down more than 2% at each change we cannot consider that. Therefore does that mean we really have to compute the payment at the rate ceiling? Am I interpreting this correctly? And if one of their loans on the credit report is a HELOC we must do the same? Is there a debt calculation specific on credit cards? (yes I am getting paranoid at this point)
No, you don’t have to use the ceiling as the fully indexed rate. The fully indexed rate is going to be your index at consummation plus your margin.
Check out the commentary to 43(b)(3) – it gives various examples that might be helpful.
And yes, you need to calculate the payment for simultaneous loans (other covered loans or HELOCs secured by the same dwelling and made to the same borrower at or before consummation) in accordance with 1026.43(c)(6). And I’m not aware of any specific calculation for credit card debt under the general ATR other than under c(7).