Finance
Under Regulation Z, an advertisement for a Virginia home loan that mentions a specific interest rate must also:
AState the appraised value of the home
BDisclose the APR if the rate is stated✓ Correct
CInclude the minimum down payment required
DList the maximum loan term available
Explanation
Regulation Z (TILA) requires that if an advertisement mentions a specific interest rate, it must also disclose the Annual Percentage Rate (APR), which reflects the total cost of credit.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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