Finance
A Texas adjustable-rate mortgage (ARM) with a 2/6 cap means:
AThe rate can adjust 2% per year with a 6% lifetime cap✓ Correct
BThe first adjustment can be 2% and each subsequent adjustment can be 6%
CThe rate adjusts every 2 years with a 6% total cap
DThe initial rate is fixed for 2 years and the rate can adjust 6% per year after that
Explanation
Cap structures on ARMs limit rate changes. A 2/6 cap means the rate cannot increase more than 2% per adjustment period and no more than 6% over the life of the loan.
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