Question

You are considering a 5/1 ARM. What does the 5 represent? . A.The number of years between adjustments in the interest rate . B.The number of years that a fixed interest rate will be applied to the loan . C.The total number of years in the loan . D.The interest rate of the initial fixed-rate loan period

Answer 1

Answer:

B: The number of years that a fixed interest rate will be applied to the loan

Explanation:

APEX

Answer 2

The number of years between interest rate adjustments is represented by the number 5, which is. So, choice (a) is the right answer.

What is adjustable-rate mortgage?

A mortgage that has an adjustable interest rate (ARM) is a loan for a residence. The initial interest rate on an ARM is fixed for a set length of time.

The term's “5” denotes the length of time the rate will be fixed, and the “1” denotes how frequently it will adjust after that (once per year). As a result, it is already clear how important the insurance is.

As a result, option (a) is correct.

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