Chapter 6

Question 1

ARM

Answer 1

Adjustable Rate Mortgage

-The interest rate adjust with the index

Question 2

APR

Answer 2

Annual percentage Rate

-interest rate on a loan on an annual basis

Question 3

Closing Disclosure

Answer 3

Reflects the actual terms of the transaction

Question 4

CFPB

Answer 4

Consumer Financial Protection Bureau

-Regulates and controls all consumer loans.

Question 5

Creditor

Answer 5

Person who extends credit more the 25 times per year

-more then 5 times in a year if transactions are secured by real estate

Question 6

Disclosure

Answer 6

A written statement that details for the buyer/norrower all the information involved in the transaction

Question 7

Finance Charge

Answer 7

• Interest charges
• discount points
• appraisal fees
• inspections fees
• any mortgage insurance fees

Question 8

HELOC

Answer 8

-Home Equity Line of Credit

Question 9

Loan Estimate

Answer 9

must be sent to the borrower within 3 business days of applying for the loan

Question 10

Regulation Z

Answer 10

Requires disclosure of all finance charges

Question 11

Right of Recission

Answer 11

Right to cancel the loan

Question 12

Triggers

Answer 12

terms used in advertisement

• Interest Rate
• Dow payment
• loan period
• finance charges
• payment amounts

Question 13

TILA

Answer 13

how to calculate the cost of credit by mandating the disclosure of the APR which is a single number allowing easy comparison of loan rates