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Brainliest + Points! Please explain!

Which is the correct order for mortgage loan types from lowest typical interest rate to highest typical interest rate?

A.
fixed rate, balloon, ARM

B.
balloon, ARM, fixed rate

C.
balloon, fixed rate, ARM

D.
fixed rate, ARM, balloon

Respuesta :

MrCreighton

The answer here is B.

Balloon mortgages are usually the lowest because they are the shortest, and usually the least risky for banks.

ARM (adjustable rate mortgages) are next because they start lower than fixed rate because the interest rate is subject to change throughout the loan

Fixed rates are usually the highest because the bank wants to hedge against increasing interest rates in the future.

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