Finance
What is a 'teaser rate' in a Delaware adjustable-rate mortgage?
AA rate that increases over time regardless of market conditions
BA discounted initial interest rate that is lower than the fully indexed rate, typically for a limited time✓ Correct
CAn interest rate cap on the first year of the loan
DA rate set below the prime rate for qualified borrowers
Explanation
A teaser rate is a below-market introductory rate offered on an ARM for a limited period. When it expires, the rate adjusts to the fully indexed rate (index + margin), which may be significantly higher.
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