Hey all--hubby and I started the refi process, and we secured a rate of 4.25% on a 15 year loan.
Anyway on the truth in lending, it shows the apr as 4.637%--the loan officer said it just represents the amount truly financed, and that my interest payment is based on my rate and not on my apr. Can anyone verify??? The truth in lending was the first time we saw interest at less than half our home value....crazy.
The rate was on the other documents but when I saw the APR on the truth in lending I started asking questions. Someone please let me know.
The APR on the TIL reflects all of the pre-paid finance charges (PFC) that are charged to you at closing - pre-paid interest, origination/discount fees, most lender fees, escrow settlement fee, etc. are all items that are included in the APR calculation.
You'll find a lot of good reading on it at http://mtgprofessor.com/mandatory_disclosures.htm as well.
The bottom line is that your monthly payments are going to be calculated using the 4.25% interest rate. Use any online mortgage calculator, plug in your principal, rate, and length or mortgage, and you'll get exactly what you'll have to pay each month (principal and interest, not any escrowed taxes or insurance). It should match what your lender is quoting.
4.25% is a great rate!