Finance
The margin in an ARM loan is:
AThe initial interest rate set at loan origination
BThe fixed percentage added to the index to determine the fully indexed rate✓ Correct
CThe lifetime interest rate cap
DThe fee charged for early payoff
Explanation
The margin is the fixed percentage that is added to the ARM's index rate to determine the fully indexed interest rate (Margin + Index = Fully Indexed Rate).
Related Alabama Finance Questions
- Assumable mortgages allow a buyer to:
- A short sale occurs when a property sells for:
- A cooperative financing arrangement called a 'piggyback loan' involves:
- A land contract (contract for deed) transfers legal title to the buyer:
- Which of the following statements about VA loans is TRUE?
- The primary purpose of the Equal Credit Opportunity Act (ECOA) is to:
- A lender who charges a fee for processing, originating, and underwriting a mortgage loan is charging a(n):
- In Alabama, the document that creates a lien on real property as security for a mortgage loan is called a:
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →