Which is true of an adjustable rate mortgage?

Answers

Answer 1

Answer: An adjustable rate mortgage is also popularly known as thevaluable rate mortgage or the floating rate mortgage. This type of mortgage ischaracterized by which the interest rate that will be paid will differ based ona particular benchmark. The first interest rate is usually fixed for a periodof time and then change after regularly, monthly or bimonthly depending on theagreement. An ARM margin is the term given to the borrower’s interest rate thatis based on a benchmark plus the interest rate.

Answer 2

Answer:

An adjustable rate mortgage allows for fluctuating interest rates based on economic conditions, offering potential changes to the borrower's repayment amount over time. Therefore, option B is correct.

An adjustable rate mortgage (ARM) is a type of home loan where the interest rate is not fixed and can vary over the life of the loan. The interest rate adjustments are typically tied to a specific financial index, such as the prime rate or the Treasury rate.

As a result, the borrower's monthly payments can change periodically, either increasing or decreasing, based on the movement of the index.

This feature makes ARMs different from fixed-rate mortgages, offering potential advantages such as initial lower rates but also introducing uncertainty and the possibility of higher payments in the future.

Therefore, option B is correct.

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Most probably, your complete question is this:

What is true of an adjustable rate mortgage?

A. the borrower can adjust monthly payment depending on his budget

B. the interest rate may change depending on the condition of the economy

C. the lender can adjust the monthly payments dates whenever he wants to

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Answers

Answer:

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Explanation:

Answer:

Your answer is vegetables and raw fish.. Hope this helps! xx

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