10
QuizMultiple Choice

Mortgages

Question 10 • 26-27 Ignite Financial Literacy Personal Finance - EL3403

What may be a concern if you have an adjustable rate mortgage (ARM)?

Answer
A
After the initial fixed rate period, your rate may increase.
B
Your payment will constantly change during your initial fixed rate period.
C
After the initial fixed rate period, your rate may decrease.
D
A portion of your rate pays the commission of your mortgage broker.

Explanation

An adjustable-rate mortgage (ARM) typically begins with a fixed-rate period, after which the interest rate can change. A key concern is that the rate may increase, raising your monthly payment; this matches “After the initial fixed rate period, your rate may increase.”

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