A 30-year fixed-rate mortgage offers the borrower:
Correct Answer
B) Stable monthly principal and interest payments for the entire term
The main advantage of a fixed-rate mortgage is payment stability. The principal and interest payment stays the same for 30 years, protecting the borrower from interest rate increases. However, total interest paid is higher than shorter-term loans.
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Related Topics & Key Terms
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Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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