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A Borrower Seeking a Mortgage Today Is Often Presented with the Choice

Question 21

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A borrower seeking a mortgage today is often presented with the choice between a mortgage whose interest rate and monthly payment stays fixed for the duration of the loan, or a mortgage whose interest rate and monthly payment can change as other interest rates change. Typically the interest rate on the fixed-rate mortgage is higher. Having learned the five core principles, does this make sense?

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Yes. The lender is shifting risk to the ...

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