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I need answers for all the questions? Adjustable rate mortgages (ARMs) allow mortgage rates adjust to market conditions which of the following is not true?
I need answers for all the questions? Adjustable rate mortgages (ARMs) allow mortgage rates adjust to market conditions which of the following is not true? A Formula and frequency of adjustment varies by contract. B. Some contracts enable the mortgage holder to swap into fixed within period. C. There is no limit the to swap into to how high the mortgage rate on an ARM can adjust D. Borrowers with ARMs face uncertainty about future interest payments One reason financial institutions like to hold ARMs is to stabilize their profit margins, true/false? Balloon payment mortgages do not fully amortize over the term of the note, leaving a balance due at maturity, true or false? Balloon payment mortgages often require interest payments for 3.5 years before the borrower must pay the full amount of principal if they cannot refinance, true or false? Amortization of principal in a normal- loan (we are no longer discussing balloon payments) is (high/low) _ when the loan is first issued and (high/low) _ as gets closer to maturity Second mortgages: A. Can be used in conjunction with the primary or first mortgage. B. often matures earlier than the first mortgage. C. Has a higher interest rate than the first mortgage owing to greater default risk. D. All of the above. The development of a secondary mortgage market (meaning mortgages are traded or held among financial institutions): A. Allows the originating institution to sell a mortgage. B. Allows institutions to invest in mortgages even if they do not originate or service them. C. Allows institutional investors to sell mortgages. D. All of the above. Mortgage companies: A. Sell the mortgages they write quickly. B. Do not maintain large mortgage portfolios. C. Are not as (directly) exposed to interest rate risk as other financial institutions. D. All of the above
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