Chapter 04

Bi-weekly loan payments: increase the time of repayment can be made even though the loan terms do not specify it. equal 12 annual payments can also be accomplished by making two extra payments at the end of the year.

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Some advantages of an ARM are: lower credit scores allowed, lower interest rates and smaller initial costs. lower interest rates, easier to qualify and smaller initial costs. easier to qualify, lower interest rates and payments may increase. payments can adjust monthly, payments can increase and payments may decrease.

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An ARM is characterized by the following, EXCEPT The risk taken by the lender is shared by the borrower. The borrower can usually qualify for a larger loan amount. The borrower can make payments for less than the interest due. The borrower may be able to make lower payments at the beginning of repayment.

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