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What are “caps”?

April 26, 2017caps

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What are “caps”?

7 Answers

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“Caps” are limits that are placed on the changes allowed in the interest rate and/or monthly payment on an adjustable rate mortgage. There are annual “caps” and a lifetime “cap” that is a rate that can never be exceeded.

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“Caps” are limits that are placed on the changes allowed in the interest rate and/or monthly payment on an adjustable rate mortgage.There are annual “caps” and a lifetime “cap” that is a rate that can never be exceeded.

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Caps are limits that are placed on the changes allowed in the interest rate and/or monthly payment on an adjustable, balloon mortgages. For example, if you had a one-year adjustable rate mortgage and the caps were 2.0% per year and a 6.0% lifetime cap, then the most that it could go up or down is 2.0% in any one year and 6.0% over the lifetime of the loan. Example; if your start rate is 5.00% and the lifetime cap is 6.00%, the lifetime cap of this loan would be 11.00%.

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“Caps” are limits that are placed on the changes allowed in the interest rate and/or monthly payment on an adjustable rate mortgage.

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Caps are the baby teeth. They are called caps because they do not have deep roots like the permanent teeth and when the permanent tooth pushes the cap off, it looks like it was a “hat” sitting on top of the new tooth.