Definition of Cap:

Orange County Cap:

A maximum/minimum restriction pre-set by a Orange County mortgage lender on how much a borrower's monthly payment or interest rate can increase or decrease in a given month and/or year. Conforming and Jumbo loansFannie MaeFreddie Mac and FHA Orange County Adjustable rate mortgages (ARMs) always include a “cap” to protect borrowers from big leaps in monthly payments which could cause a burden to the borrower leading to a possible default in the loan.

 

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