We are doing a 2nd mortgage loan for consumer home improvement. It is an adjustable rate loan starting with 6.50% and adjust every 5 years. When preparing our Trid disclosures we are getting a warning on our application checklist (“DEEP DISCOUNT” This loan contains a deep disocuont feature. This feature is only available for adjustable rate mortgage transactions. For all other consumer loans, the variable rate example in your Truth in Lending disclosure will be incorrect. Please adjust the periodic interest rate cap to avoid creating a deep discount feature) I feel sure it is where Prime is so high. We have our rate to only adjust by no more than 1% when it adjust. Do we need to change anything? Are there particular requirements, such as payment is due on the 1st day of the month when closing the loan?