Finance
The 'annual percentage rate' (APR) on an Arizona mortgage is typically HIGHER than the note rate because:
AIt includes future rate adjustments
BIt includes the note rate plus lender fees (points, origination), expressing the true cost of credit over the loan term✓ Correct
CArizona law requires APR to exceed the note rate
DLenders add a markup to the note rate for APR disclosure
Explanation
APR includes the note rate plus most lender fees (points, origination, certain closing costs) spread over the loan term, giving borrowers a better basis for comparing loan costs than the note rate alone.
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