Finance
A Nebraska adjustable-rate mortgage (ARM) has a 2/6 cap. This means:
AThe rate adjusts every 2 years up to 6% total
BThe rate can increase 2% per adjustment and 6% lifetime✓ Correct
CThe loan term is 2 years with a 6-year option
DThe initial rate is fixed for 2 years then adjusts 6 times
Explanation
A 2/6 cap on an ARM means the rate can increase a maximum of 2% per adjustment period and 6% over the life of the loan. This protects borrowers from extreme rate increases.
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