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What Is an Adjustable-Rate Mortgage (ARM)

Question 56

Multiple Choice

What is an adjustable-rate mortgage (ARM) ?


A) A home loan in which the interest rate varies based on a benchmark plus an additional spread,called an ARM margin; also known as a "variable-rate mortgage" or a "floating-rate mortgage"
B) A loan that has a specified payment amount and a specified repayment schedule
C) A ratio expressing the amount of a first mortgage lien as a percentage of the total appraised value of real property
D) A mortgage with a strict rate

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