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A mortgage is a type of installment loan. How does an adjustable rate mortgage work?

a.
the mortgage is paid off sooner
c.
the interest rate changes
b.
payment amount stays the same
d.
the interest rate stays the same

User Salieri
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2 Answers

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I'm pretty sure it will be C the interest rate changes. A mortgage is a type of installment loan. An adjustable rate mortgage work with the interest rate changes.
User Gent
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Answer:

C) the interest rate changes

Step-by-step explanation:

Mortgage loans are a type of loan in which the borrower places his home as collateral in exchange for a lower interest loan. This is a way for the lender to have a security of payment in case of a default by the borrower. The type of loan will depend on agreement between the parties. There are fixed rate mortgage loans, where the rate does not change over the entire contract period, or adjustable rate mortgage loans, where the rate charged on the loan varies according to market interest rate fluctuations. The best form of loan will depend on the profile of each borrower. The important thing is to analyze long before making the decision, as this type of loan is longstanding and may not have the contract terminated.

User Denis Wang
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