Finance
In New Mexico, the 'note rate' on a mortgage differs from the APR because the note rate is:
AAlways higher than the APR
BThe stated interest rate on the promissory note, without including fees and points that are incorporated into the APR✓ Correct
CThe rate after all fees are deducted
DThe rate guaranteed for the loan term
Explanation
The note rate (nominal rate) is the stated interest rate in the promissory note. The APR is higher than the note rate because it includes the note rate plus other loan costs (points, origination fees) expressed as an annual rate, making it a more complete cost measure.
Related New Mexico Finance Questions
- A mortgage that requires a large final payment at the end of the loan term is called a:
- In New Mexico, a 'mortgage banker' differs from a 'mortgage broker' in that a mortgage banker:
- A New Mexico homebuyer is using a USDA Guaranteed Rural Housing loan. A key requirement is:
- In New Mexico, a 'participatory mortgage' or 'shared appreciation mortgage' allows a lender to receive:
- In New Mexico, a 'portfolio loan' is kept by the originating lender rather than being sold on the secondary market. This is beneficial when:
- In New Mexico, a 'reverse mortgage' (Home Equity Conversion Mortgage) allows homeowners who are:
- In New Mexico, a 'non-recourse loan' means that if the borrower defaults:
- In New Mexico, which of the following is TRUE about FHA Mortgage Insurance Premium (MIP)?
Practice More New Mexico Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New Mexico Quiz →