Finance
Under the federal Truth in Lending Act (TILA), a Massachusetts mortgage lender must provide the borrower with the Annual Percentage Rate (APR) to disclose:
AOnly the interest rate on the loan
BThe true cost of the loan including interest rate, points, and certain fees expressed as a yearly rate✓ Correct
CThe monthly payment amount only
DThe loan-to-value ratio
Explanation
The APR required by TILA represents the true annual cost of credit, incorporating the interest rate plus points, origination fees, and other financing costs. This allows borrowers to compare loan offers on an apples-to-apples basis. The APR is almost always higher than the stated interest rate.
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