Finance
A Montana buyer's adjustable-rate mortgage (ARM) has an initial rate of 4.5% with a 2/6 cap structure. This means the rate can adjust:
A2% per adjustment period and 6% total over the loan's life✓ Correct
BUp to 6% in the first adjustment then 2% thereafter
COnly twice during the loan term
DBy no more than $200 per payment period
Explanation
A 2/6 ARM cap structure means the rate can increase a maximum of 2% per adjustment period and no more than 6% total above the initial rate over the life of the loan, protecting borrowers from unlimited rate increases.
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