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To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the
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To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the prevailing market mortgage rate. This rate is referred to as a(n) ___________.A. margin rate

B. teaser rate
C. index rate
D. discount rate

User Tatigo
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Answer:

B. Teaser rate

Step-by-step explanation:

Teaser rate also called introductory rate is an interest rate that is usually below market that last for a short period of time. It is the beginning rate placed on credit products. It is a form of discounted interest rate that is offered for a short period of time. The rate can be as low as 0% for that short period of time and goes back to the normal rate after the short period of time expires.

User Serafins
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