Finance
A Washington borrower's adjustable-rate mortgage has an initial rate of 4.5%, a 2% annual adjustment cap, and a 6% lifetime cap. The maximum rate this loan could ever reach is:
A8.5%
B10.5%✓ Correct
C12.5%
D6%
Explanation
Maximum rate = Initial rate + Lifetime cap = 4.5% + 6% = 10.5%. Understanding mortgage finance is essential for Washington real estate professionals advising buyers.. The correct answer is 10.5%.
Related Washington Finance Questions
- In Washington, a 'recourse' loan allows the lender to:
- In Washington, a 'contract for deed' (land installment contract) is considered a financing instrument rather than a sale because:
- In Washington, which of the following is a 'secondary market' entity that purchases mortgages from primary lenders?
- In Washington, a seller's concession (seller paying buyer's closing costs) may affect the:
- What is the primary difference between a construction loan and a permanent mortgage?
- The Truth in Lending Act (TILA) requires lenders to disclose the Annual Percentage Rate (APR). The APR differs from the interest rate because it:
- A Washington buyer uses a bridge loan to:
- A Washington buyer borrows $400,000 at 7% annual interest. What is the interest accrued in the first month?
Practice More Washington Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Washington Quiz →