A Borrower with a 30-Year Loan Can Create a GEM

question 22

Multiple Choice

A borrower with a 30-year loan can create a GEM by

• A) simply increasing the monthly payments beyond what is required and designating that the excess be applied entirely to the principal.
• B) converting his ARM into a conventional mortgage.
• C) converting his conventional mortgage into an ARM.
• D) converting his conventional mortgage into a GPM.

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Definitions:

Utility

A measure of satisfaction, usefulness, or value that an individual or society derives from a good or service.

Consuming

The act of using up goods or services either by purchasing or utilizing them.

Maximizing

Seeking to make as large as possible; in economics, often involves actions like profit maximization or utility maximization.

Daisy

A common name for a variety of flowering plants in the family Asteraceae, known for their simple yet appealing appearance.