The Closing Disclosure includes a section showing how much total interest the borrower will pay over the life of the loan. A borrower sees that for a $300,000 30-year fixed-rate loan at 6.5 percent, the total interest exceeds $382,000. What purpose does this disclosure serve?
Correct Answer
C) To help borrowers understand the true long-term cost of financing and make informed decisions about loan terms
Disclosing the total interest paid over the loan's life helps borrowers understand the true cost of borrowing. This information may influence decisions about loan term, interest rate, and whether to make additional principal payments.
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