Adjustable Rate Mortgage Disclosure

This disclosure describes the Adjustable Rate Mortgage you are considering, and how the rate and payment you will pay over the life of the loan may change.

How Interest Rate Can Change

• Interest rate can change every 36 months.
• Interest rate cannot increase or decrease more than 2% on any change date.
• Interest rate cannot increase more than 5% over the term of the loan.
• Interest rate cannot decrease more than 1% below initial interest rate.

How Interest Rate and Payment Are Determined

• Interest rate will be based on an index plus a margin of 2.50%.
• Interest rate will be based on the Weekly Average Yield on U.S. Treasury Securities Adjusted to a Constant Maturity of 3 Years.
• Interest rate will be calculated by adding the margin to the most recent index available and rounding it to the nearest 1/8 of a per cent.
• Monthly payment will be based on the new interest rate, loan balance, and remaining term of loan.

How Monthly Payment Can Change

• Monthly payment can change every 36 months based on changes in the interest rate.
• New payment amount will be due the first month following the interest rate change date.
• You will be notified in writing at least 25 days before the due date of a payment at the new amount.
• Adjustment notice will contain the following information:
  1. New interest rate and payment amount
  2. Index value used
  3. Previous interest rate and index value used
  4. Current loan balance as of change date
  5. Date first payment at new level is due
  6. Source of index

***Please inquire as to the current index and margin used by Fidelity Federal.

THE FOLLOWING EXAMPLES SHOW HOW YOUR PAYMENT WOULD HAVE CHANGED UNDER THE ARM PROGRAM BASED ON A 10,000.00 LOAN FOR 15 YEARS. THE INDEXS BELOW ARE U.S. TREASURY CONSTANT MATURITY RATES FOR THE FIRST WEEK-ENDING DATES FOR JANUARY OF EACH YEAR.

Adjustable Rate Mortgage Table

Year	Index	Margin	Rate%	Payment	Balance
1994	4.59	2.50	7.125	90.58	$9968.72
1995	7.81
1996	5.26
1997	6.06	2.50	8.50	97.11	$8748.63
1998	5.70
1999	4.60
2000	6.39	2.50	8.875	99.20	$7360.91
2001	4.77
2002	3.69
2003	2.24	2.50	6.875*	93.79	$5520.61
2004	2.36
2005	3.36
2006	4.30	2.50	6.875	93.80	$3043.64
2007	4.68
2008	2.89

* This interest rate reflects the 2% change cap.
** This interest rate reflects the 5% lifetime cap.
*** This interest rate reflects the floor.

To see what your payments would have been during this period, divide your mortgage amount by $10,000.00; then multiply the resulting amount by the last monthly payment shown above. Please Note! For the purpose of this disclosure we have allowed the interest floor to be the same as the lifetime cap of 5%. This permits us to show actual interest rate fluctuations over this length of time.

Using 2008's Index of 2.89% plus a margin of 2.50% the rounded initial interest rate would be 5.375% with a payment of $81.05. The maximum interest rate over the life of the loan would be 10.375% with a payment of $109.77.
E.I. Your mortgage of $60,000.00 divided by $10,000.00 = 6
6 x $81.05 = $486.30.