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What is in your APR????

By
Mortgage and Lending with Major Mortgage USA/Branch Manager

  After a rather intereseting and at times humourous discussion today,

with a loan officer that has been in the business for a lonnnnnnggggg time.  I thought I would share with you what exactly is in your APR

The fees that are generally included in the APR:

•·               Pre-paid interest. The interest paid from the date the loan closes to the end of the month. Most mortgage companies assume 15 days of interest in their calculations. However, companies may use any number between 1 and 30!

•·                Loan-processing fee

•·                Document-preparation fee

•·                 Private mortgage-insurance

•·                 Points - both discount points and origination points

•·                 Underwriting fee

 

 

The fees that are normally not included in the APR:

•·                  Escrow fee

•·                  Attorney fee

•·                  Notary fee

•·                  Home-inspection fees

•·                  Title or abstract fee

•·                  Transfer taxes

•·                  Credit report

•·                  Document preparation (charged by the closing agent)

•·                  Appraisal fee

•·                  Recording fee

In most cases your APR should be within .25% of your note rate. 

Sean Allen
International Financing Solutions - Fort Myers, FL
International Financing Solutions

The TIL is the most useless piece of paper the loan applicant has to sign or be provided. All the Interest Rate and APR does when on the same document is totally confused the buyer and many times the mortgage professional. Other than telling the borrower that the true cost of that home over "x" years will be "XX" amount, it ain't worth a squat.

Sean Allen

May 12, 2008 10:50 AM
Melissa Breeland
Residential Mortgage of SC - Charleston, SC

Ok Joe, LOVE your blog wall paper! How did you do that? Also, I agree with Sean Allen...a TILA is worthless and each mortgage processing / originating software system calculates the APR differently. You can not compare apples to apples unless each Loan Officer in the "toaster war" is using the same program i.e...mortgageware or Calyx or something. AND, even then... that is assuming they include all the fees they are suppose to include.

At your service,

Melissa "The Mortgage Maven" Breeland

Residential Mortgage South Carolina, LLC

902 Savannah Hwy

Charleston, SC 29407

Best: (843) 991-6532

Fax: (843) 725-2363

 Life is stressful enough. When it comes time to finance or refinance your home, you should be able to work with a mortgage professional who will provide you with great rates, the perfect loan product and no hassles. Luckily... you can. Give me a call when you're ready - and relax.

Apply Online at www.TheMortgageMaven.com

May 13, 2008 03:16 AM
Joe Adams
Major Mortgage USA/Branch Manager - Montrose, CO

Sean and Melissa you are both right it is a worthless piese of paper BUT it is a required piece and the APR is required in any ad that states payments or some other "trigger"......

May 13, 2008 03:23 AM