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are more opportunities to adjust upwards. Floor - A clause that sets the minimum rate for the interest rate of an ARM home mortgage rate refinance xxasdf Most loans come with a Start Rate = Floor feature, but this is primarily for Non-Conforming (aka Sub-Prime or Program Lending) loan products. This prevents an ARM loan from ever adjusting lower. An "A Paper" loan typically has either home mortgage rate refinance xxasdf Floor or 2% below start. Initial Change Cap - ARM loans have a specified maximum first adjustment that is typically higher than allowed on subsequent changes. Periodic Change Cap - The maximum interest home mortgage rate refinance xxasdf adjustment for every subsequent periodic adjustment. Life Cap (Ceiling) - The maximum upwards adjustment of an ARM loan. Typically on first mortgages no more than 6% Crucial Information About Caps Loan caps provide payment protection against payment shock. Most First Mortgage loans have a 5% or 6% Life Cap. Higher risk products, such home mortgage rate refinance xxasdf Monthly Adjustable loans with Negative amortization and Home Equity Lines of Credit aka HELOC have different ways of structuring the Cap than a typical First Lien Mortgage. First Lien Caps with no Negative amortization Most First Mortgage loans have a 5% or 6% Life Cap. If the adjustment period is 6 months or 1 year ( the two most common periods on the market), then it takes anywhere from 2-4 maxiumum upward adjustments to reach this home mortgage rate refinance xxasdf Negative amortization ARM caps See the complete article for the type of ARM that NegAM loans are by nature. Most of them are Monthly Adjustable ARMs and the life cap or ceiling is simply expressed as a maximum rate, usually 9.95% or 10.95% these days. Beware home mortgage rate refinance xxasdf some of these loans have 14-16% ceilings, you