Definition of Periodic Payment Cap:

Periodic Payment Cap:

These always relate to Orange County Adjustable Rate Mortgages:

For an adjustable-rate mortgage (ARM) this is where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.

Periodic Rate Cap:

For an adjustable-rate mortgage (ARM) this is a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index (COFI or LIBOR) might be.

 

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