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One reason why adjustable rate mortgages (ARMs) have become popular has to do with the impact that they have on the interest rate risk that is borne by the parties involved. If interest rates were to rise on a level-payment mortgage (LPM), the interest rate risk of the loan would typically be borne by:___________

Respuesta :

Answer:

Only lenders

Explanation:

ARM stands or termed as the Adjustable-rate mortgage, which is a kind or the type of the mortgage, in which the rate of the interest, which is applied on the balance that is outstanding  and varies through the life of the loan.

When the rate of interest which increases on the level payment mortgage (LPM), that the risk of the interest rate of the loan will be bear by the lender only, who lends the money.