Finance
The 'note rate' on a mortgage is:
AThe APR including all finance charges
BThe contractual interest rate stated on the promissory note✓ Correct
CThe lender's prime rate plus margin
DThe maximum rate the ARM can reach
Explanation
The note rate (or contract rate) is the interest rate stated on the borrower's promissory note — the actual rate used to calculate monthly interest payments. It differs from the APR, which includes fees and other finance charges.
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