The ARM Note contains a provision that locks out the Borrower from prepaying during the first loan year.

The Prepayment Premium is a percentage (determined as described below) of the unpaid principal balance that will remain after crediting the scheduled payment due on the first of the month in which a prepayment takes place. A different percentage applies for each Loan Year as defined in the ARM Note. There is no Prepayment Premium during the last 90 days prior to the maturity date of the Mortgage Loan. Further, if the loan is refinanced with Alliant Capital, up to 1.0% of the prepayment penalty may be waived.

The Borrower has two prepayment options available:

I. Declining Prepayment Option - 5%-4%-3%-2%-1%

May only be used with ARM mortgages that have a conversion option. Prepayment is locked out for the first year for a 5 or 7-year term loan or 5% for a 10-year loan, followed by 4%, 3%, 2% and 1% prepayment premiums in years 2 through 10 of the loan term.  If a loan utilizing this prepayment option is converted into a Fixed Rate mortgage loan, a prepayment premium may be due upon conversion in accordance with the following requirements:

if the ARM Mortgage Loan is converted into a Fixed Rate Mortgage Loan any time after the lockout period and prior to the end of the 4th Loan Year, the full amount of the Prepayment Premium percentage is due; and

if the ARM Mortgage Loan is converted into a Fixed Rate Mortgage Loan any time during the 5th Loan Year, no Prepayment Premium is due.

II. Fixed Prepayment Option

The Borrower pays a fixed prepayment premium of 1% of the unpaid principal balance at payoff after the one year lockout period.