Rate Cap - Law Dictionary Search Results
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rate cap a limit on an ARM on how much the interest rate or mortgage payment may change. Rate caps limit how much the interest rates can rise or fall on the adjustment dates and over the life of the loan. Source: U.S. Department of Housing and Urban Development ...
cap
cap a limit, such as one placed on an adjustable rate mortgage, on how much a monthly payment or interest rate can increase or decrease, either at each adjustment period or during the life of the mortgage. Payment caps do not limit the amount of interest the lender is earning, so they may cause negative amortization. Source: U.S. Department of Housing and Urban Development ...
life cap
life cap a limit on the range interest rates can increase or decrease over the life of an adjustable-rate mortgage (ARM). Source: U.S. Department of Housing and Urban Development ...
payment cap
payment cap a limit on how much an ARM's payment may increase, regardless of how much the interest rate increases. Source: U.S. Department of Housing and Urban Development ...
arm
arm Adjustable Rate Mortgage; a mortgage loan subject to changes in interest rates; when rates change, ARM monthly payments increase or decrease at intervals determined by the lender; the change in monthly payment amount, however, is usually subject to a cap. Source: U.S. Department of Housing and Urban Development ...
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