Finance
A Michigan ARM (Adjustable Rate Mortgage) includes a 2/2/6 cap structure. The '6' means:
AThe rate can increase 6% at the first adjustment
BThe maximum lifetime rate increase over the start rate is 6%✓ Correct
CThe rate adjusts every 6 months
DThe loan term is 6 years
Explanation
In an ARM cap structure (e.g., 2/2/6), the numbers represent: first adjustment cap / periodic adjustment cap / lifetime cap. The '6' means the rate can never increase more than 6% above the initial rate over the life of the loan.
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