Finance
Iowa's Truth in Lending annual percentage rate (APR) is higher than the stated note rate because:
AIowa law requires artificially inflated APR disclosures
BThe APR includes not only the interest rate but also certain loan fees and costs spread over the loan term✓ Correct
CAPR includes the property tax and insurance payments
DAPR is always double the stated rate by federal regulation
Explanation
The APR is the true cost of credit expressed as a yearly rate, incorporating the interest rate plus certain fees (origination fees, points, mortgage insurance) amortized over the loan term. This higher figure allows borrowers to compare loan costs across lenders more accurately.
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