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The Purpose of a Rate Cap in an Adjustable Rate

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The purpose of a rate cap in an adjustable rate mortgage is to limit the amount by which the interest rate can vary.


Definitions:

Units

A measure of product quantity, either as individual items or a standard measurement used for inventory and production.

Client-Visits

The activity of going to see clients in person for business purposes such as consultations, sales presentations, and relationship building.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, allowing for a more accurate comparison of actual to budgeted expenses.

Tenant-Days

A measure used in property management to calculate the number of days a property is occupied by tenants over a certain period.

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