While Reviewing the Documents on Your New Mortgage You Discover

question 7

Multiple Choice

While reviewing the documents on your new mortgage you discover that the APR is greater than the contract interest rate even though you paid no discount points.How can this happen?

• A) the lender made a mistake,the rates should be equal
• B) the market rate increased just before the loan was signed and the lender adjusted for that
• C) you paid financing fees other than discount points
• D) the contract rate does not account for monthly compounding
• E) the lender made a mistake,the contract rate is always greater than the APR

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Definitions:

Good Faith

Acting with honesty and sincerity, without intent to deceive or unfair advantage, especially in contractual or negotiation contexts.

Fire Insurance Policies

Contracts that provide coverage for damage or loss to property because of fire.

Hostile Fires

Fires that escape their intended boundaries or start in an unauthorized area, causing damage or destruction.

Indirect Damage

Harm that does not directly result from an action but occurs as a secondary effect, often less tangible and harder to quantify.