Finance
An Indiana adjustable-rate mortgage (ARM) typically includes a 'cap' that limits:
AThe total amount that can be borrowed
BThe amount the interest rate can increase per adjustment period and over the life of the loan✓ Correct
CThe number of times the rate can be adjusted
DThe maximum LTV permitted
Explanation
ARM caps limit interest rate increases to protect borrowers from extreme rate hikes. Periodic caps limit changes per adjustment period (e.g., 2% per year); lifetime caps limit total increase over the loan term (e.g., 6% above the initial rate).
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