Finance
In North Dakota, the 'annual percentage rate' (APR) on a mortgage is typically higher than the stated interest rate because it includes:
AOnly the principal payments
BThe interest rate plus certain fees and costs of the loan, expressed as an annual rate✓ Correct
CThe property tax component
DThe insurance premium component
Explanation
The APR reflects the total cost of credit including the interest rate plus certain fees (origination fees, points, mortgage insurance), expressed as an annual percentage. It gives consumers a more complete cost comparison than the nominal interest rate alone.
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