Finance
A Connecticut borrower wants to compare two mortgages from different lenders. Lender A offers 6.5% with 1 point; Lender B offers 6.75% with no points. To compare these loans fairly, the borrower should consider:
AOnly the interest rates since points are optional
BThe APR, which incorporates the cost of points and other fees into a single annual rate for comparison✓ Correct
CThe monthly payments only
DThe loan term only
Explanation
The APR (Annual Percentage Rate) incorporates the interest rate plus points, origination fees, and other required costs into a single rate that reflects the true cost of borrowing. Using APR allows borrowers to compare loan offers on equal footing.
Related Connecticut Finance Questions
- A Connecticut borrower's total monthly debt obligations are $2,800 and gross monthly income is $8,000. What is the back-end DTI ratio?
- Discount points paid by a borrower at closing are used to:
- In Connecticut, 'predatory lending' typically refers to:
- Which government-sponsored enterprise (GSE) purchases conventional conforming mortgage loans on the secondary market?
- A Connecticut borrower's front-end (housing) debt-to-income ratio is calculated by dividing:
- A 'blanket mortgage' covers:
- A Connecticut buyer is considering an adjustable-rate mortgage (ARM). Which statement is TRUE about ARMs?
- Under RESPA, a lender must provide the Loan Estimate to a borrower within how many business days of receiving a loan application?
Practice More Connecticut Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Connecticut Quiz →