Interest rate allowable during the life of mortgage is

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Reference no: EM132038794

Consider the following information for the next two questions regarding an ARM loan:

The index for year one is 6%, the margin is 2%, the lifetime cap is 6%, the annual cap is 2%, and the first-year-only teaser is 1%.

What is the first year contract rate?

The maximum interest rate allowable during the life of the mortgage is?

Reference no: EM132038794

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