Posts tagged as:

apr

August 22, 2009

Truth in Lending Disclosure

I have always been wondering why we have two different disclosures (TIL and GFE) to serve one and the same purpose… Why can’t it be just one form with all a borrower has to know? The funniest thing, though, is the fact that both The Department of Housing and Urban Development (HUD – the author [...]

June 18, 2009

I had the rate of my upcoming mortgage locked, but the APR presented to me a couple of weeks later was already different (obviously higher!) and proclaimed subject to more changes any time before closing. I mean, how is this possible in the first place?

As many other borrowers, you probably got deceived by the APR’s apparent similarity to the interest rate and assumed that “locking the rate” means locking all the rates involved. Unfortunately for borrowers, that is not the case. The APR does not only include the interest rate and the points, which do get locked, but also [...]

May 14, 2009

Annual percentage rate (APR)

The Annual Percentage Rate (APR) was created with good intentions to make complicated things if not simple, then at least simpler. It even works in many cases! Unfortunately, it also fails in just as many other cases, which sort of devaluates it as a universally reliable tool. The APR looks a lot like an interest [...]