Finance
A Michigan adjustable-rate mortgage (ARM) differs from a fixed-rate mortgage because:
AThe loan term is shorter
BThe interest rate can change periodically based on a specified index✓ Correct
CThe down payment is higher
DIt can only be used for investment properties
Explanation
An ARM's interest rate is tied to a financial index and can adjust periodically (e.g., annually) based on market conditions, causing the monthly payment to change over the life of the loan.
Related Michigan Finance Questions
- A buyer's loan-to-value (LTV) ratio is 90%. This means:
- In Michigan, a home equity line of credit (HELOC) is secured by:
- In Michigan, the 'Gramm-Leach-Bliley Act' affects real estate because it:
- Which type of mortgage loan is NOT insured or guaranteed by a government agency?
- In Michigan, a 'deficiency judgment' in foreclosure occurs when:
- In Michigan, 'mortgage acceleration' occurs when:
- A Michigan buyer's debt-to-income ratio is used by lenders to:
- Michigan Housing Development Authority (MSHDA) programs primarily assist:
Practice More Michigan Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Michigan Quiz →