Finance
An adjustable-rate mortgage (ARM) differs from a fixed-rate mortgage in that the ARM's:
APrincipal balance never changes
BInterest rate can change periodically based on a market index✓ Correct
CMonthly payment is fixed for the life of the loan
DTerm is always shorter than 15 years
Explanation
An ARM has an interest rate that adjusts at set intervals (e.g., annually) based on a designated market index (e.g., SOFR). This means the monthly payment amount can increase or decrease over time.
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