Finance
A Vermont adjustable rate mortgage with a '5/1 ARM' means:
AThe rate adjusts 5 times per year
BThe rate is fixed for 5 years, then adjusts annually✓ Correct
CThe maximum rate cap is 5%
DThe margin is 5 and the index is 1
Explanation
A 5/1 ARM has a fixed interest rate for the first 5 years of the loan term, then adjusts annually based on a market index plus a margin. The '5' is the initial fixed period and '1' is the adjustment frequency.
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