Under the anti-steering rule, if a borrower qualifies for a 15-year fixed rate loan at 5.5%, a 30-year fixed rate loan at 6.0%, and a 30-year interest-only loan at 5.0%, which loan satisfies the 'lowest rate without risky features' requirement?
Correct Answer
B) The 15-year fixed rate loan at 5.5%
The 15-year fixed rate loan at 5.5% represents the lowest rate without risky features. The interest-only loan, despite having the lowest rate at 5.0%, contains a risky feature (interest-only payments) that disqualifies it from this category. Between the two qualifying loans, the 15-year loan has the lower rate.
Why This Is the Correct Answer
The 15-year fixed rate loan at 5.5% represents the lowest rate without risky features. The interest-only loan, despite having the lowest rate at 5.0%, contains a risky feature (interest-only payments) that disqualifies it from this category. Between the two qualifying loans, the 15-year loan has the lower rate.
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