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PIT_PIT [208]
1 year ago
9

despite the fact that conventional mortgages offer fixed payments, some borrowers will select an adjustable rate mortgage over a

conventional mortgage because:
Business
1 answer:
Nostrana [21]1 year ago
4 0

Despite the fact that conventional mortgages offer fixed payments, some borrowers will select an adjustable rate mortgage over a conventional mortgage because "the adjustable rate mortgage features lower starting payments".

  • Adjustable-rate mortgages (ARMs), often known as variable-rate mortgages, feature an interest rate that fluctuates based on changes in a comparable financial index linked to the loan. In general, if the index rate rises or falls, your monthly payment will rise or fall.
  • ARMs, on the other hand, expose borrowers to increased monthly payments once the introductory term expires. The interest rate will then alter at regular periods, usually every year or six months.
  • The ARM can be adjusted. So, while it may start off cheaper, it is not certain to stay that way. In fact, if your interest rate rises, your payments could skyrocket. You may end up with significantly higher overall interest costs than if you had taken out the fixed-rate loan.

Thus this is the meaning of mortgage.

Refer here to learn more about mortgage: brainly.com/question/1318711

#SPJ1

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