Finance
An 'adjustable-rate mortgage' (ARM) in NC features:
AA fixed interest rate for the full loan term
BAn interest rate that changes periodically based on a market index✓ Correct
CInterest-only payments for 30 years
DA rate that is always lower than any fixed-rate mortgage
Explanation
An ARM has an interest rate that adjusts periodically (after an initial fixed period) based on a benchmark index (such as SOFR), which can cause monthly payments to rise or fall.
Related North Carolina Finance Questions
- A 'buydown' in NC mortgage financing refers to:
- A conventional loan is best described as:
- A 'loan-to-value ratio' (LTV) of 80% on a $300,000 North Carolina property means the loan amount is:
- A borrower in North Carolina has a gross monthly income of $5,500 and monthly debts of $800. What is the maximum monthly housing payment allowed under a 28% front-end DTI ratio?
- What is the purpose of RESPA (Real Estate Settlement Procedures Act) in a North Carolina transaction?
- A North Carolina buyer's monthly payment is $1,800 and their gross monthly income is $5,400. What is their front-end (housing) ratio?
- A 'reverse mortgage' in North Carolina is available to homeowners who are:
- A 'conforming loan' in North Carolina is one that:
Practice More North Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →