With the recent popularity of adjustable-rate mortgages (ARM), lenders have begun to offer ARMs with different adjustment periods. Which of the following ARM choices will most likely have the highest initial rate?
A) Three-year-one-year ARM
B) Five-year-one-year ARM
C) Seven-year-one-year ARM
D) Ten-year-one-year ARM

Question

Quizplus · Accepted Answer

The longer the initial adjustment period, the higher the initial interest rate will typically be. Therefore, the ten-year-one-year ARM will likely have the highest initial rate among the options given.

With the Recent Popularity of Adjustable-Rate Mortgages (ARM), Lenders Have