Which statement is not correct? ARM may make sense for homebuyers if the buyers believe they will not stay in the home for more than 3 to 5 years and believe they will be able to sell or refinance at reasonable rates in the future. In a 4/1 ARM the payment is fixed for the first 4 years, and then adjusts annually. The 4/2/5 cap means the first-rate adjustment can not be more than 4%, after that the maximum annwal change is 2% and the maximum interest rate increase over the life of the mortgage is 5%. Lenders prefer adjustable-rate mortgage (ARM). To convince barrowers to choore ARM, lenders need give sone candy by offering lower initiah interest rates on ARM than on fixed rate loans. ARM resuits in higher default risk for lenders in periods of rising interest rates. When rates rise, borrowers have more difficulty making the piviments on their mortgage