arm (adjustable rate mortgage) loans typically have two numbers as part of their name. these numbers have a…

arm (adjustable rate mortgage) loans typically have two numbers as part of their name. these numbers have a meaning.\nin a 5/6 arm loan, what does the 6 represent?\nchoose 1 answer:\na the interest rate changes every 6 years.\nb the interest rate can change 2 times a year after the first 5 years.\nc the loan lasts for 6 years total.\nd the same interest rate lasts for the first 6 years of the loan.

arm (adjustable rate mortgage) loans typically have two numbers as part of their name. these numbers have a meaning.\nin a 5/6 arm loan, what does the 6 represent?\nchoose 1 answer:\na the interest rate changes every 6 years.\nb the interest rate can change 2 times a year after the first 5 years.\nc the loan lasts for 6 years total.\nd the same interest rate lasts for the first 6 years of the loan.

Answer

Brief Explanations:

In an adjustable - rate mortgage (ARM) like a 5/6 ARM, the first number (5 in this case) represents the number of years the initial fixed - rate period lasts. The second number (6) represents the number of years between subsequent rate adjustments after the initial fixed - rate period ends. That is, the interest rate changes every 6 years after the initial fixed - rate period.

Answer:

A. The interest rate changes every 6 years.