Finance
An adjustable-rate mortgage (ARM) in Oklahoma typically features a periodic cap that:
ACaps the total amount the borrower can borrow
BLimits how much the interest rate can change at each adjustment period, protecting the borrower from sudden large payment increases✓ Correct
CSets a maximum property value for ARM eligibility
DCaps the loan-to-value ratio
Explanation
ARM periodic caps limit the interest rate increase at each adjustment interval (e.g., 2% per year). Life caps limit the total change over the life of the loan. These protect borrowers from extreme payment shock if rates rise rapidly.
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