General Mortgage Knowledge · 20% of the SAFE exammedium
Correct answer: Fixed rate only
Lump sum disbursement requires a FIXED rate — the rate is set at closing and the borrower receives all available proceeds at once. Other options — line of credit and monthly payments (tenure or term) — use ADJUSTABLE rates. This is a key distinction: if you want all the money upfront, you get rate certainty (fixed) but lose flexibility. If you want ongoing access (line of credit) or monthly income, you accept rate variability (adjustable).
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