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Which of the following statements is true? Multiple Choice All ARM's have fixed Interest rates for the first 5 years. Teaser rates are artificially low beginning interest rates that are offerred in some ARM's as a selling inducement. The beginning rate on a hybrid ARM is referred to as the teaser rate. By law, all ARM's must be fully amortizing loans. You wish to purchase a property for $400,000. You intend to make a 20% downpayment and you have the money to do so. You have two mortgage choices. You can finance the remaining 80% with a 30 year fixed rate mortgage at an interest rate of 3% with no closing costs (technically, the tender pays all closing costs at this rate). Alternatively, you can choose a 30 year, 5/1 ARM with an interest rate of 1%. The ARM has an annual cap of 2% and a lifetime cap of 5%. Assume a worst case scenario (for you, the borrower for interest rates throughout. What is the payment on the fixed rate mortgage? Multiple Choice $783,42 $1,029.35 $1349.13 S1523.33