Finance
What is the difference between a 'fixed-rate mortgage' and an 'adjustable-rate mortgage' (ARM)?
AFixed-rate mortgages are only for commercial properties in Nevada
BA fixed-rate mortgage maintains the same interest rate for the entire loan term, while an ARM has an interest rate that can change periodically based on an index, resulting in fluctuating monthly payments✓ Correct
CARMs are illegal in Nevada
DFixed-rate mortgages always have lower monthly payments than ARMs
Explanation
Fixed-rate mortgages offer payment stability — the rate never changes. ARMs start with a lower introductory rate that adjusts after an initial period (e.g., 5/1 ARM adjusts after year 5, then annually). In Nevada's Las Vegas market, ARMs were heavily used during the 2000s housing bubble and contributed to foreclosures when rates reset. Nevada agents should explain both options and associated risks to buyers.
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