Finance
A Pennsylvania ARM (adjustable-rate mortgage) cap structure of 2/2/5 means:
A2% initial rate, 2% margin, 5-year fixed period
BMaximum 2% increase per adjustment, 2% per year lifetime cap, 5% total cap
C2% initial cap, 2% periodic cap per adjustment, 5% lifetime cap above the initial rate✓ Correct
D2-year fixed, 2-year adjustment period, 5% down payment required
Explanation
A 2/2/5 ARM cap structure means: the rate cannot increase more than 2% at the first adjustment, no more than 2% at each subsequent adjustment, and no more than 5% total above the initial start rate over the life of the loan.
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