General Mortgage KnowledgeQuestion 172 of 400
On an ARM, the initial 'start' or 'teaser' rate is best described as:
a.The lifetime cap
b.The margin
c.The permanent rate
d.A temporarily low introductory rate that later adjusts
Explanation
The teaser (start) rate is a lower introductory rate for the initial fixed period; the rate later adjusts based on index plus margin subject to caps. It is not the cap, the margin, or a permanent rate.
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