? About Refinance House APR

[Tink-n-MrIncredible]

I have a question for those of you who are refinancing. On the Federal Truth-In-Lending Disclosures where does the Annual Percentage Rate (APR)come from? On my old loan papers the amount column for APR the percentage is the same as the interest rate. On the refinance papers they are totally different. Any help would be appreciated.

 

[minnie1928]

I have a question for those of you who are refinancing. On the Federal Truth-In-Lending Disclosures where does the Annual Percentage Rate (APR)come from? On my old loan papers the amount column for APR the percentage is the same as the interest rate. On the refinance papers they are totally different. Any help would be appreciated.

I'm thinking the difference might be points. Did you pay points on your refinance but did not on your original loan? Points are, in effect, prepaid interest.

 

[Cibahwewah]

Most loans today have interest rates with terms that are calculated based on 360 days. Since a real year has 365 days in it, the APR is actually slightly higher.

 

[minnie1928]

Most loans today have interest rates with terms that are calculated based on 360 days. Since a real year has 365 days in it, the APR is actually slightly higher.

That's true

 

[Tink-n-MrIncredible]

The Discount points are 3.125%. The interest rate is 4.125% but the APR is 4.851e%. It is a 15yr bi-weekly.

 

[Luckymomoftwo]

The APR on the Truth in Lending includes some items that are listed as pre-paid items. The Truth in Lending has to disclose the APR to you to let you know how much it is "costing" you to borrow the money when you consider those pre-paid expenses. Pre-paid expenses are your homeowner's insurance & taxes to set up your escrow, and pre-paid interest from the day you close until the first day of the following month. The APR has nothing at all to do with the Interest Rate at which you will pay back your mortgage. It's just another figure thrown in to confuse the heck out of borrowers!

 

[Tink-n-MrIncredible]

Thank you very much.