Which of the following mortgage scenarios will benefit the homeowner the most?
A) Adjustable rate mortgage when interest rate increases.
B) Fixed rate mortgage when interest rates falls.
C) Fixed rare mortgage when interest rate rises.
D) None of the above, as banker's interest will always be protected.

Question

Quizplus · Accepted Answer

A fixed rate mortgage as interest rates rise ensures that the homeowner's interest rate remains the same, providing a predictable and stable mortgage payment. With an adjustable rate mortgage, the interest rate will increase and so will the homeowner's mortgage payment, potentially causing financial strain. As for option B, a fixed rate mortgage may still benefit the homeowner when interest rates fall by locking in a favorable interest rate for the duration of the mortgage. However, this scenario does not provide as much benefit as option C. Option D is not correct as policies and regulations exist to protect both the interests of the banker and the homeowner.

Which of the Following Mortgage Scenarios Will Benefit the Homeowner