Finance
The annual percentage rate (APR) on a mortgage loan is different from the interest rate because the APR:
AIs always lower than the interest rate
BIncludes the interest rate plus certain fees and costs, providing a truer cost of borrowing✓ Correct
CApplies only to adjustable-rate mortgages
DIs set by the Mississippi Banking Department
Explanation
APR includes the interest rate plus points, broker fees, and other charges, expressing the true annual cost of the loan. Lenders are required to disclose APR under the Truth in Lending Act (TILA).
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