Asked by MadiCAT Panther on Jul 07, 2024
Verified
If Jake signs a graduated-payment mortgage,he will pay a variable interest rate but make fixed monthly payments over the term of the loan.
Graduated-Payment Mortgage
A mortgage that has a fixed interest rate during the life of the mortgage; however, the monthly payments made by the mortgagor increase over the term of the loan.
Variable Interest
An interest rate on a loan or security that can change over time based on the underlying benchmark interest rates.
- Understand the implications of loan-specific features such as adjustable rates, balloon payments, and government backing.
Verified Answer
KG
khaled gamalJul 12, 2024
Final Answer :
False
Explanation :
In a graduated-payment mortgage, the borrower's payments start lower and gradually increase, usually annually, but the interest rate is typically fixed, not variable.
Learning Objectives
- Understand the implications of loan-specific features such as adjustable rates, balloon payments, and government backing.