Lenders offer caps with their adjustable rate mortgages (ARMs) so you can have more control over your monthly mortgage payment. Usually, there are two types of rate caps:
-- A per-adjustment cap, which specifies the most your interest rate can rise from one adjustment period to the next,
-- and a lifetime adjustment cap, which specifies how much your interest rate can rise over the life of your loan.
Ask your lender about both caps when evaluating any ARM product.