Under the Truth in Lending Act (TILA), the APR disclosed to a borrower represents:
Why The total cost of credit expressed as a yearly rate Is Correct
Answer B: The total cost of credit expressed as a yearly rate
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
People Also Study
Related Alabama Questions
- What does the Truth in Lending Act (TILA) require lenders to disclose to Alabama borrowers?Finance
- A lender charges 2 origination points plus $1,500 in other fees on a $225,000 loan. What are the total upfront loan costs?Real Estate Math
- The Truth in Lending Act (TILA) requires lenders to disclose the:Finance
- Which type of loan insures the lender against loss and allows borrowers to purchase with as little as 3.5% down with a 580+ credit score?Finance
- Annual Percentage Rate (APR) differs from the stated interest rate because APR:Finance
- A property's purchase price is $180,000 with a 20% down payment. The buyer also pays 2 points on the loan. What is the total cost of the points?Real Estate Math
- A buyer obtains a $200,000 loan at 6% annual interest. What is the first month's interest payment?Real Estate Math
- A $250,000 loan at 5% annual interest has a monthly payment of $1,342. How much of the first payment goes to interest?Real Estate Math
Key Terms to Know
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →