Fixed rate mortgages are popular with home buyers who plan to stay in their homes for at least ________ years and want to know what their payment will be.
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A. B. C. D.C
Fixed rate mortgages are a type of mortgage where the interest rate remains the same throughout the entire term of the loan. This means that the borrower's monthly mortgage payment will also remain the same, providing predictability and stability for the borrower.
When considering a fixed rate mortgage, the borrower will typically want to consider their long-term plans for staying in the home. Fixed rate mortgages are popular with home buyers who plan to stay in their homes for a longer period of time, as they provide certainty around the monthly mortgage payment for the entire term of the loan.
Of the answer options provided, the best answer would be C. 5 to 7 years. This is because a fixed rate mortgage typically has a term of 15, 20, or 30 years. Home buyers who plan to stay in their homes for at least 5 to 7 years will have enough time to benefit from the predictability and stability of a fixed rate mortgage.
Answer options A and D, 5 years and 3 years respectively, are too short of a time period for a fixed rate mortgage to provide significant benefit. If a home buyer plans to sell the home or refinance the mortgage within such a short period of time, a fixed rate mortgage may not be the best option.
Answer option B, 6 years, is a reasonable time frame for a fixed rate mortgage to provide benefit, but the range provided in answer option C, 5 to 7 years, allows for more flexibility and covers a broader range of potential home buyer situations.