Sentences with phrase «rise during the term of the loan»
ARM products are less risky for mortgage lenders, because if interest rates rise during the term of the loan, the lender gets more interest income.
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For example, if the loan term depends on the value of interest rate adjustments during the term of the loan, to calculate the maximum loan term, the creditor assumes that the interest rate rises as rapidly as possible after consummation, taking into account the terms of the legal obligation, including any applicable caps on interest rate adjustments and lifetime interest rate cap.