Finance
What is 'margin' in an adjustable-rate mortgage?
AThe lender's profit on the sale of the mortgage in the secondary market
BA fixed percentage added to the index to determine the fully indexed interest rate✓ Correct
CThe amount by which the rate may adjust at each adjustment period
DThe difference between the mortgage rate and the prime rate
Explanation
The margin is a fixed number of percentage points added to the ARM's index rate to calculate the fully indexed rate. For example, if the index is 2% and the margin is 2.5%, the fully indexed rate is 4.5%.
Related Delaware Finance Questions
- What is 'cash-out refinancing' in Delaware real estate?
- What is 'points' in Delaware mortgage financing?
- What is a 'VA loan' in Delaware real estate?
- What is a 'jumbo loan' in Delaware mortgage financing?
- What is a 'blanket mortgage' in Delaware real estate?
- A Delaware homeowner who refinances their primary residence mortgage has a federally mandated right of rescission for how long?
- Discount points paid at loan closing serve what purpose?
- What is a 'good faith estimate' (GFE), and has it been replaced?
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →