Finance
A West Virginia borrower who takes out an adjustable-rate mortgage (ARM) should understand that:
AThe interest rate is fixed for the life of the loan
BThe interest rate can change periodically based on an index, affecting monthly payments✓ Correct
CARMs always have lower total costs than fixed-rate mortgages
DThe loan must be refinanced every five years
Explanation
With an adjustable-rate mortgage, the interest rate is tied to a financial index and can rise or fall periodically according to the loan terms. West Virginia borrowers must understand the caps, adjustment periods, and potential payment increases before committing to an ARM.
Related West Virginia Finance Questions
- A West Virginia property buyer obtains a USDA Rural Development loan. This loan is designed to:
- A West Virginia buyer obtains a $250,000 FHA loan. What is the minimum down payment required?
- A West Virginia property owner who refinances their mortgage to obtain a lower interest rate is engaging in:
- A West Virginia borrower who is underwater on their mortgage (owes more than the home is worth) wants to sell. If the lender agrees to accept less than the full balance owed, this is called a:
- An 'origination fee' charged by a West Virginia mortgage lender is best described as:
- A West Virginia homeowner who wants to access equity in their home without selling can use a:
- The debt-to-income (DTI) ratio used by West Virginia lenders compares:
- A West Virginia lender who sells its originated mortgages to Fannie Mae is participating in:
Practice More West Virginia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free West Virginia Quiz →