Finance
What is an ARM initial adjustment period?
AThe period before the loan closes
BThe fixed-rate period before the first rate adjustment on an adjustable-rate mortgage✓ Correct
CThe time to process the first rate change
DThe period between ARM payments
Explanation
The initial adjustment period on an ARM is the fixed-rate period before the first rate adjustment. A 5/1 ARM has a 5-year initial period, after which the rate adjusts annually based on the index plus margin.
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