Finance
An adjustable-rate mortgage (ARM) in New Jersey poses the risk to the borrower that:
AThe loan term will be shortened unexpectedly
BMonthly payments may increase if the interest rate index rises✓ Correct
CThe lender can call the loan at any time
DThe property can be seized without default
Explanation
With an ARM, the interest rate adjusts periodically based on a market index. If the index rises, the borrower's monthly payment increases, potentially causing payment shock.
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