Finance
A Maine borrower with an adjustable-rate mortgage (ARM) should be aware that their monthly payment may increase when:
AThe index rate decreases
BThe index rate increases above the margin plus cap limits✓ Correct
CThe loan balance decreases to 80% LTV
DThey pay more than the minimum payment
Explanation
An ARM payment may increase when the index rate rises. The new rate is typically calculated as the index plus a margin, subject to periodic and lifetime caps.
Related Maine Finance Questions
- In Maine, a 'balloon mortgage' is one where:
- A Maine home buyer is comparing a 15-year mortgage at 5.5% vs. a 30-year mortgage at 6.0% on a $300,000 loan. The 15-year loan has a monthly payment of approximately $2,451 and the 30-year loan has approximately $1,799. The difference in total interest paid over the life of each loan (15-year vs. 30-year) favors the 15-year loan by approximately:
- Under the Homeowners Protection Act (HPA), a Maine borrower with a conventional loan must be informed of their right to cancel PMI when:
- In Maine, which type of mortgage loan allows the borrower to pay only interest for an initial period before full amortization begins?
- Maine allows homeowners to deduct mortgage interest from state income taxes. The mortgage interest deduction on Maine state taxes generally mirrors:
- A Maine lender must provide which document to the buyer within 3 business days of receiving a mortgage application?
- A Maine homeowner who is 120 days delinquent on their mortgage payment receives a 'notice of default' from the lender. This marks the beginning of the formal:
- A Maine borrower with a $225,000 30-year mortgage at 7% has a monthly P&I payment of approximately $1,497. How much of the very first payment goes to interest?
Practice More Maine Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Maine Quiz →