For a HELOC with a 10-year draw period followed by a 15-year repayment period, which statement about APR disclosure is correct?
Correct Answer
B) APR must reflect payments over the entire 25-year term including repayment period
Under Regulation Z Section 1026.6(a), HELOC APR calculations must consider the entire term of the plan, including both the draw and repayment periods, to provide borrowers with a complete picture of the credit costs.
Why This Is the Correct Answer
Under Regulation Z Section 1026.6(a), HELOC APR calculations must consider the entire term of the plan, including both the draw and repayment periods, to provide borrowers with a complete picture of the credit costs.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
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A lender originates a first-lien mortgage with an APR of 2.8% above the APOR. The borrower has a credit score of 720 and provides full income documentation. Which HPML requirement applies even though the borrower appears well-qualified?
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Which of the following fees would NOT be included in the finance charge calculation under TILA?