A mortgage advertisement says, 'Only 5% down and payments from $2,350 per month.' Under Regulation Z, what additional disclosure set must also appear?
Correct Answer
C) The down payment amount or percentage, the terms of repayment, and the APR, plus a statement if the APR may increase
Stating trigger terms such as a down payment amount or the amount of a payment requires additional disclosures in a closed-end credit advertisement. Regulation Z requires disclosure of the amount or percentage of the down payment, the terms of repayment, and the APR, with a statement if the APR may increase after consummation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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