Ridgeline Bank provides Shirley with a mortgage to buy a home. The rate of interest is fixed for three years and then adjusts annually. This is

Question

Ridgeline Bank provides Shirley with a mortgage to buy a home. The rate of interest is fixed for three years and then adjusts annually. This is​

Quizplus · Accepted Answer

The mortgage provided by Ridgeline Bank to Shirley is an adjustable-rate mortgage because it starts with a fixed interest rate for three years and then adjusts annually, eventually resulting in a different interest rate. A fixed-rate mortgage, on the other hand, has a constant interest rate throughout the loan term. The other options, creditor's composition agreement and guaranty agreement, are not related to mortgages.

Ridgeline Bank Provides Shirley with a Mortgage to Buy a Home