Finance
Under the federal Truth in Lending Act (TILA), the Annual Percentage Rate (APR) disclosed to a New York borrower differs from the note rate because the APR:
AIs always lower than the note rate
BIncludes certain fees and costs in addition to the interest rate✓ Correct
CIs set by the New York Department of Financial Services
DOnly applies to adjustable rate mortgages
Explanation
The APR reflects the true cost of borrowing by including certain fees (origination fees, mortgage insurance, etc.) in addition to the interest rate, making it generally higher than the note rate and enabling consumers to compare loan offers.
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