Question

Which of these describes how a 5/1 ARM mortgage works?


The annual fees on the mortgage are only charged during the first five years of the loan.


The interest rate charged on the mortgage is five times the normal interest rate.


The interest rate is fixed for five years and then changes every year afterward.


The monthly payment is one-fifth of the total purchase price of the house.

Answer 1

Answer:

The interest rate is fixed for five years and then changes every year afterward.

Explanation:

ARM stands for Adjustable Rate Mortgage. This is the only answer that discusses a taste that adjusts.