Finance
What is a '15/1 ARM' mortgage and how does it work?
AA 15-year fixed mortgage that converts to a 1-year loan
BAn adjustable-rate mortgage with a 15-year fixed period followed by annual rate adjustments✓ Correct
CA mortgage requiring 15% down payment with 1 point discount fee
DAn ARM that resets monthly for the first 15 years
Explanation
A 15/1 ARM has a fixed interest rate for the first 15 years (providing stability), then adjusts annually based on the index plus margin for the remaining loan term. Hybrid ARMs like this offer initial rate stability (often at lower rates than 30-year fixed loans) while carrying adjustment risk after the fixed period ends — relevant for Oregon buyers planning medium-term ownership.
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