California Real Estate Practice Exam

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What is NOT required to be disclosed under the Truth-in-Lending Law?

Annual percentage rate (APR)
Length of loan
Monthly payment
Total finance charge in purchase of single-family, owner-occupied dwelling

The correct answer is: Annual percentage rate (APR)

The Truth-in-Lending Law is designed to ensure that consumers are informed about the terms and costs associated with their loans. It mandates the disclosure of specific key elements that will enable potential borrowers to make informed decisions. In this context, while the annual percentage rate (APR) is crucial for understanding the cost of borrowing money over the term of the loan, it is not portrayed as a specific requirement under the Truth-in-Lending Law when compared to the other aspects involved. The law does require the length of the loan, the monthly payment amounts, and the total finance charges, all of which are integral for consumers to gauge their financial commitments and compare different lending options. The APR, while important, serves more as a summary measure of the cost of borrowing rather than an explicit requirement in the same way that the length of the loan, monthly payments, and total finance charges must be clearly expressed to the borrower. This distinction highlights why the annual percentage rate is not classified as something that must be disclosed under the law.