Stephanie is planning to buy a house and can choose between a traditional mortgage at 5% interest or an adjustable-rate mortgage (ARM) at 4.5% interest. What factor would make the ARM less attractive to Stephanie?

Select the best answer from the choices provided.
A. Interest rates are dropping and are expected to continue to fall.
B. Home values are rising and are expected to continue to rise.
C. Stephanie expects to receive a promotion within a year.
D. Stephanie could not afford the payment if the interest rate rose to 5.5%.

Question

Stephanie is planning to buy a house and can choose between a traditional mortgage at 5% interest or an adjustable-rate mortgage (ARM) at 4.5% interest. What factor would make the ARM less attractive to Stephanie?

Select the best answer from the choices provided.
A. Interest rates are dropping and are expected to continue to fall.
B. Home values are rising and are expected to continue to rise.
C. Stephanie expects to receive a promotion within a year.
D. Stephanie could not afford the payment if the interest rate rose to 5.5%.