Finance
A Wyoming borrower's note rate is 6.5% but the APR disclosed is 6.9%. The difference is due to:
AThe lender charging an illegal premium
BLoan fees and costs (points, origination fees) being included in the APR calculation✓ Correct
CA variable rate adjustment
DThe difference between monthly and annual calculations
Explanation
The Annual Percentage Rate (APR) reflects the true cost of borrowing by including the interest rate plus loan fees (points, origination fees, mortgage insurance). The APR is always equal to or higher than the note rate and is required to be disclosed under TILA.
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