Finance
An Ohio borrower has a 5/1 ARM. What does '5/1' mean?
A5% initial rate, 1% cap on increases
BFixed rate for 5 years, then adjusts every 1 year✓ Correct
C5-year balloon payment with 1-year grace period
D5% rate for the first payment, then adjusts once
Explanation
A 5/1 ARM has a fixed interest rate for the first 5 years, then adjusts every 1 year thereafter based on a specified index plus margin.
Related Ohio Finance Questions
- A 'construction loan' in Ohio is designed to:
- In Ohio, which of the following is an example of a 'hard money' loan?
- An Ohio buyer obtains a VA loan. Which of the following is TRUE about VA loans?
- An adjustable-rate mortgage (ARM) in Ohio includes a 'cap' provision that:
- In Ohio, a 'jumbo loan' is a mortgage that:
- What is a balloon mortgage?
- A 'participation mortgage' in Ohio commercial lending involves:
- In Ohio, a 'home equity line of credit' (HELOC) is secured by:
Practice More Ohio Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Ohio Quiz →