New York State Real Estate Salesperson Licensing Exam

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What does Regulation Z require lenders to disclose about loans?

Property taxes
Loan terms and conditions
Total cost of the loan
Annual percentage rate

The correct answer is: Annual percentage rate

Regulation Z, which implements the Truth in Lending Act, requires lenders to disclose the annual percentage rate (APR) associated with a loan. The APR is crucial as it provides borrowers with a clear understanding of the true cost of borrowing, taking into account not just the interest rate but also any fees or additional costs associated with the loan. This disclosure helps borrowers compare different financing options more effectively. While the total cost of the loan, loan terms and conditions, and property taxes are important elements of the borrowing process, they are not specifically mandated by Regulation Z for disclosure in the same way that the APR is. Lenders may provide information about these other factors, but the primary focus of Regulation Z is ensuring borrowers are aware of the APR, promoting transparency and informed decision-making regarding loan choices.