Finance
A NH buyer's loan officer quotes a 30-year fixed mortgage at 7.25% with an APR of 7.55%. The difference between the rate and APR is due to:
ANH state tax on mortgage interest
BLender fees, points, and other closing costs included in the APR calculation✓ Correct
CThe buyer's credit score being below 700
DThe property being in a flood zone
Explanation
The APR is higher than the stated rate because it incorporates lender fees, origination charges, discount points, and other costs required to obtain the loan, all expressed as an annual rate over the loan term. TILA requires APR disclosure to enable comparison shopping.
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