Finance
A Kansas homebuyer obtains a mortgage with an 'interest rate cap' on an ARM. This cap limits:
AThe total interest paid over the loan term
BHow much the interest rate can increase per adjustment period and over the loan's lifetime✓ Correct
CThe lender's ability to foreclose
DThe buyer's refinancing options
Explanation
Interest rate caps on ARMs limit how much the rate can increase during any single adjustment period (periodic cap) and over the life of the loan (lifetime cap), protecting borrowers from extreme rate increases.
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