Finance
In Hawaii, what is the 'teaser rate' on an adjustable-rate mortgage?
AA. The rate advertised to attract attention but not available to any borrower
BB. A temporarily low initial interest rate designed to attract borrowers, which then adjusts higher after the initial period✓ Correct
CC. A special rate for borrowers with excellent credit only
DD. The rate charged on mortgage points
Explanation
A teaser rate is an artificially low introductory interest rate on an ARM that resets higher after an initial period, potentially causing payment shock for unprepared borrowers.
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