Finance
What is an 'interest rate cap' on an Idaho adjustable rate mortgage (ARM)?
AThe maximum loan amount available at a given rate
BA limit on how much the interest rate can increase at each adjustment or over the life of the loan✓ Correct
CA cap on the number of rate adjustments
DThe minimum interest rate on the loan
Explanation
Interest rate caps on ARMs limit how much the rate can increase at each adjustment period (periodic cap), and how much it can increase over the total life of the loan (lifetime cap), protecting borrowers from unlimited rate increases.
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