Can someone explain this to me because i dont understand this
A bank offers three mortgages shown. Which mortgage(s) will have fixed payments for at least the first 3 years? Fixed rate mortgage at 5% for 30 years
Adjustable rate mortgage at 3% for 30 years with terms 3/1 and a cap of 2/5
Balloon mortgage at 4% with terms 30/5

Question

Can someone explain this to me because i dont understand this
  A bank offers three mortgages shown. Which mortgage(s) will have fixed payments for at least the first 3 years?     Fixed rate mortgage at 5% for 30 years
    Adjustable rate mortgage at 3% for 30 years with terms 3/1 and a cap of 2/5
    Balloon mortgage at 4% with terms 30/5

anonymous · Answer

All will have fixed pmts for 3 years. 
A) Fixed rate and pmt for 30 years
B) Fixed rate and pmt for 3 years and then will adjust every year after a cap of 2/5
C) Fixed rate and pmt amortized over 30 years but the entire princ/int balance due in 5 years.  So you would need to refinance or sell in 5 years time.

anonymous · Answer

Oh okay I misunderstood the question thank you so much @precalmom

anonymous · Answer

My pleasure.