Question

Borrowers tend to prefer ________ to ________, whereas lenders prefer ________. arms; fixed-rate loans; fixed-rate loans fixed-rate loans; arms; arms fixed-rate loans; arms; fixed-rate loans arms; fixed-rate loans; arms

Answer 1

Borrowers tend to prefer fixed-rate loans than ARMs (adjustable-rate mortages), whereas lenders prefer ARMs. 

Fixed-rate loans are those with fixed interest rates, which means that they do not fluctuate or vary over time during the fixed rate period of the loan. As such, the borrowers are able to accurately predict how much their future payments will be.

ARMs are a type of mortgage wherein there can be changes or variations on the interest rate applied on the outstanding balance within the duration of the loan.