Which mortgage type has interest rates set by the lender?

Which mortgage type has interest rates set by the lender?

• A. Conventional mortgage
• B. Adjustable-rate mortgage
• C. FHA loan
• D. VA loan

Answer: (A)

Interest rates on a conventional mortgage are determined by the lender based on the borrower's credit, down payment, debt aggressively, and current market rates. Because this financing is private and not tied to a government program, the lender sets the rate at the time of origination to reflect the individual risk and pricing in the market. In contrast, an adjustable-rate mortgage starts with an initial rate set by the lender but then changes over time according to a published index, so the rate is not fixed for the life of the loan. FHA and VA loans are government-backed programs, and while lenders quote rates within those programs, the defining feature here is that conventional financing is private-pricing driven by the lender, not by a government-guaranteed structure.

Interest rates on a conventional mortgage are determined by the lender based on the borrower's credit, down payment, debt aggressively, and current market rates. Because this financing is private and not tied to a government program, the lender sets the rate at the time of origination to reflect the individual risk and pricing in the market.

In contrast, an adjustable-rate mortgage starts with an initial rate set by the lender but then changes over time according to a published index, so the rate is not fixed for the life of the loan. FHA and VA loans are government-backed programs, and while lenders quote rates within those programs, the defining feature here is that conventional financing is private-pricing driven by the lender, not by a government-guaranteed structure.