General Mortgage KnowledgeQuestion 113 of 400
A borrower wants a payment that never changes for the full 30-year term regardless of market rates. Which loan feature guarantees this?
a.Fixed-rate mortgage
b.5/1 ARM
c.Interest-only loan
d.Balloon loan
Explanation
A fixed-rate mortgage keeps the same interest rate and principal-and-interest payment for the entire term. A 5/1 ARM adjusts after five years, interest-only payments change when the interest-only period ends, and a balloon requires a large lump sum at maturity.
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