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1 year ago

ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap.

1 answer:

5 0

The statement; ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap is "True".

<h3>What is (ARM) Adjustable-Rate Mortgage?</h3>

A home loan with a variable interest rate is known as an adjustable-rate mortgage (ARM). The starting interest rate on an ARM is set for a specific amount of time. Following then, the interest rate charged on the unpaid balance resets sporadically, sometimes on a monthly basis.

The characteristics of ARM are-

A mortgage with an adjustable rate (ARM) is a loan for a home whose interest rate is subject to cyclical change based on the performance of a chosen benchmark.
The amount that the interest rate and/or payments can increase annually or throughout the life of the loan are typically capped in ARMs.
For purchasers who are going to maintain the loan for a short time and can afford any potential rises in their interest rate, an ARM might be a wise financial decision.

To know more about the Adjustable-Rate Mortgage, here

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The complete question-

ARMs help lenders combat unanticipated inflation changes, interest rate changes, and a maturity gap. (True/False)

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