Choose the one most appropriate answer for each.
-the amount of time that elapses between interest rate changes on a loan
A)adjustment period
B)adjustable rate mortgage (ARM)
C)blanket mortgage
D)blended-rate loan
E)buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question

Quizplus · Accepted Answer

The amount of time between interest rate changes is the adjustment period.

Answer: K
 To limit the amount that the interest rate can change, a loan may have an interest rate cap.

Answer: L
 Negative amortization occurs when the borrower's payments are not enough to cover the interest due, resulting in the loan balance increasing instead of decreasing.

Answer: P
 A payment cap limits the amount that a borrower's payments can increase even if the interest rate rises.

Answer: T
 A wraparound mortgage is a type of loan where a new mortgage is taken out over an existing mortgage on the property, resulting in one monthly payment for the borrower.

Choose the One Most Appropriate Answer for Each