Finance
In Tennessee, the 'annual percentage rate' (APR) on a mortgage differs from the 'note rate' because the APR:
AIs always lower than the note rate
BIncludes the note rate plus financing costs like points and fees, expressed as an annual rate✓ Correct
COnly applies to adjustable rate mortgages
DIs the rate charged on late payments
Explanation
The APR includes the note interest rate plus other financing costs (points, fees, mortgage insurance) spread over the loan term, giving borrowers a more complete cost comparison tool.
Related Tennessee Finance Questions
- The Tennessee Department of Financial Institutions (TDFI) regulates:
- In Tennessee, an 'interest-only' mortgage requires the borrower to pay:
- A 'points' buy-down in a mortgage means the borrower pays upfront to:
- A construction-to-permanent loan is a financing arrangement in which:
- The Truth in Lending Act (TILA) requires lenders to disclose the:
- The primary benefit of a 15-year mortgage compared to a 30-year mortgage is:
- A 'carryback loan' or 'seller financing' is most commonly used when:
- A 'due-on-sale' clause in a mortgage or deed of trust requires that:
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