Finance
The annual percentage rate (APR) on a mortgage is typically higher than the note rate because it includes:
AOnly the principal and interest payment
BThe interest rate plus the cost of fees and other loan charges spread over the loan term✓ Correct
CThe property tax and insurance payments
DThe commission paid to the mortgage broker
Explanation
APR incorporates the note interest rate plus certain fees (origination fees, points, mortgage insurance) spread over the loan term, giving a more complete picture of borrowing cost.
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