WHAT IS A TRUTH IN LENDING DISCLOSURE STATEMENT AND WHY DO I RECEIVE IT?
Your Disclosure Statement provides information set forth by federal law (Regulation Z, RESPA). The Disclosure is designed to give you information about the costs of your credit so that you may compare those costs with those of other loan programs or lenders. Q: WHAT IS THE ANNUAL PERCENTAGE RATE? (Box “A” above) A: This should not be confused with your note rate. The Annual Percentage Rate, or APR, is the cost of your credit expressed as an annual rate. Because you may be paying closing costs, also known as prepaid finance charges (origination fee, discount points, mortgage insurance, interest), the APR on the disclosure is often higher than the interest rate on your loan. This APR can be compared to the APR of other loan programs to give you a consistent means of comparing rates and programs. Q: WHY IS THE ANNUAL PERCENTAGE RATE DIFFERENT FROM THE INTEREST RATE FOR WHICH I APPLIED? A: The APR is computed from the Amount Financed based on what your proposed payments will be on the actu
