In an advertisement stating '425 Monthly payments, 5% down, and 3.1% APR,' what piece of required information is missing?

In an advertisement stating '425 Monthly payments, 5% down, and 3.1% APR,' what piece of required information is missing?

• A. Interest rate
• B. Finance Charge
• C. Loan amount
• D. Nothing

Answer: (B)

The main concept is that mortgage advertisements must disclose the total cost of credit when they list certain terms. If an ad mentions a monthly payment and an APR, it must also reveal the finance charge—the exact dollar amount of the costs of borrowing (interest plus fees) over the loan. That dollar figure lets borrowers see the true cost, not just the rate or the payment amount, and compare offers accurately. So, the missing piece in the ad is the finance charge. The other elements, like the stated APR, are already present to indicate cost, and the loan amount isn’t required to be disclosed in every ad by itself.

The main concept is that mortgage advertisements must disclose the total cost of credit when they list certain terms. If an ad mentions a monthly payment and an APR, it must also reveal the finance charge—the exact dollar amount of the costs of borrowing (interest plus fees) over the loan. That dollar figure lets borrowers see the true cost, not just the rate or the payment amount, and compare offers accurately. So, the missing piece in the ad is the finance charge. The other elements, like the stated APR, are already present to indicate cost, and the loan amount isn’t required to be disclosed in every ad by itself.