Final answer:
A mortgage loan originator must provide information about all three adjustable-rate mortgage products to an interested loan applicant. If inflation decreases by 3%, a homeowner with an adjustable-rate mortgage would likely experience lower interest rates, which could lead to lower future loan payments.
Step-by-step explanation:
If a loan applicant expresses interest in three different adjustable-rate mortgage loan products, the mortgage loan originator must provide information about all three products. This ensures that the applicant is fully informed and can make the best decision based on a comparison of the interest rates, payment schedules, and other critical terms of each product.
When considering the impact of inflation on an adjustable-rate mortgage (ARM), it is important to understand how ARMs work relative to inflation and interest rates. ARMs have interest rates that are typically tied to an index, and as market interest rates change, so too can the interest rates on an ARM. If inflation falls unexpectedly by 3%, it would likely lead to lower interest rates for homeowners with an ARM. This is because the rate on an ARM often adjusts based on prevailing economic conditions, which tend to lead to lower interest rates when inflation decreases.
Overall, a decrease in inflation can benefit borrowers with an ARM since their future payments could potentially decrease as well, maintaining the real interest rate after accounting for inflation.