Interest Rate Decrease Cap
Definition of "Interest Rate Decrease Cap"
The maximum allowable decrease in the interest rate on an ARM each time rate is adjusted. It is usually one or two percentage points.
Popular Mortgage Terms
A facility offered by some lenders to mortgage brokers where de jure the brokers become employees of the lender but de facto they retain their independence as brokers. One of the ...
An option exercised by the borrower, at the time of the loan application or later, to 'lock in' the rates and points prevailing in the market at that time. When lenders 'lock/' they ...
The most recently published value of the index used to adjust the interest rate on an indexed ARM. ...
The highest rate possible under an ARM contract; same as 'lifetime cap.' It is often expressed as a specified number of percentage points above the initial interest rate. ...
A rate lock, plus an option to reduce the rate if market interest rates decline during the lock period. ...
The interest rate that is fixed for some specified number of months or years at the beginning of the life of an ARM. ...
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Cost-of-Funds Index, one of many interest rate indexes used to determine interest rate adjustments on an adjustable rate mortgage. ...
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