Finance
A Wyoming buyer who obtains an adjustable rate mortgage (ARM) should understand that:
AThe interest rate can never exceed the initial rate
BThe interest rate may change periodically based on an index, potentially increasing monthly payments✓ Correct
CARMs are not available in Wyoming
DThe rate is fixed for the life of the loan after the first adjustment
Explanation
An ARM has an interest rate that adjusts periodically based on a financial index (such as SOFR or LIBOR). While initial rates are typically lower than fixed-rate mortgages, payments can increase significantly if interest rates rise, creating payment risk for borrowers.
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