Finance
What is the difference between a fixed-rate and adjustable-rate mortgage (ARM)?
AFixed-rate requires a larger down payment
BFixed-rate has the same interest rate throughout; ARM can change based on an index✓ Correct
CARMs always have lower payments
DFixed-rate mortgages are only for owner-occupants
Explanation
A fixed-rate mortgage maintains the same interest rate and payment throughout the loan term. An ARM has an initial fixed period followed by rate adjustments based on a market index (SOFR, T-bill, etc.).
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