Final answer:
C. An adjustable-rate mortgage (ARM) is a type of loan in which the interest rate varies with market interest rates, providing borrowers with a starting lower interest rate compared to a fixed-rate loan.
Step-by-step explanation:
An C. adjustable-rate mortgage (ARM) is a type of loan that a borrower uses to purchase a home in which the interest rate varies with market interest rates.
This means that the interest rate can go up or down over the life of the loan based on changes in the market.
With an ARM, the borrower typically starts with a lower interest rate compared to a fixed-rate loan, but there is a certain level of uncertainty as the interest rate may increase in the future.