Residential Builder's Salesperson Practice Exam

The choice of fixed-rate mortgage is recognized as a common type of mortgage due to its straightforward nature and stability. In a fixed-rate mortgage, the interest rate remains the same throughout the life of the loan, typically ranging from 15 to 30 years. This provides borrowers with predictability in their monthly payments, making budgeting simpler. Since the interest rate is locked in at the beginning, borrowers are protected from fluctuations in interest rates that can occur in the broader market.

Adjustable-rate mortgages, while also common, can lead to varying monthly payments over time as the interest rate adjusts based on market conditions. Graduated-rate mortgages involve a lower starting interest rate that increases over time, which may not appeal to all borrowers. The term "deferred-rate mortgage" is less commonly used and can refer to specific loan arrangements that are not standard in typical residential financing. Thus, the fixed-rate mortgage remains the most prevalent choice for homeowners seeking reliability in their mortgage terms.