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

---

Definitions:

Percentage Change

A mathematical calculation that describes the degree of change over time, expressed as a fraction of the starting value.

Price Of Product

The monetary value assigned to a good or service that consumers are required to pay to acquire it.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price level in a specific time period.

Midpoint Formula

A method used in geometry to determine the exact center point between two defined points on a line segment.