What is a 'note rate' versus the 'annual percentage rate' (APR) on a Delaware mortgage?
Why The note rate is the stated interest rate on the loan; the APR includes the note rate plus other loan costs expressed as an annual rate Is Correct
Answer B: The note rate is the stated interest rate on the loan; the APR includes the note rate plus other loan costs expressed as an annual 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.
Key Finance Terms in This Question
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Key Terms to Know
A written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
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.
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.
Math Concepts
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