Frequently Asked Questions
- Why use a Broker?
- What is a Truth In Lending Disclosure and why do I receive it?
- What is the Annual Percentage Rate (APR)?
- What is the Finance Charge?
- What is the Amount Financed?
- Does this mean I will get a smaller loan than I applied for?
- What is the Total Of Payments?
- My disclosure says that if I pay the loan off early, I will not be entitled to a refund of part of the finance charge. What does this mean?
Answers
Why use a Broker?The main benefit to using a broker is that you will have someone on your side during the entire mortgage process. We like to see ourselves as advocates, working on your behalf, to bring you to a successful closing. Since we are a mortgage broker, and not a bank or banker, you have the ability to apply once with us and utilize our extensive network of regional and national lenders, as well as our expertise, in finding the best fit for your mortgage needs.
What is a Truth In Lending Disclosure and why do I receive it?
The disclosure is designed to give you information about the costs of your loan so that you may compare these costs with those of other loan programs or lenders.
What is the Annual Percentage Rate (APR)?
The Annual Percentage Rate (A.P.R.) is the cost of your credit expressed as an annual rate. Because you may be paying loan discount “points” and other “prepaid” finance charges at closing., the A.P.R. disclosed is often higher than the interest rate on your loan. This A.P.R. can be compared to the A.P.R. on other loan programs to give you a consistent means of comparing rates and programs.
What is the Finance Charge?
The Finance Charge is the cost of credit expressed in dollars. It is the total amount of interest calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the total amount of any required mortgage insurance charged over the life of the loan.
What is the Amount Financed?
The Amount Financed is the loan amount applied for, minus the Prepaid Finance Charges. Prepaid Finance charges include items paid at or before settlement, such as loan origination, commitment or discount fees (“points”), adjusted interest, and initial mortgage insurance premium. The Amount Financed is lower than the amount you applied for because it represents a NET figure. If you applied for $50,000 and the Prepaid Finance Charges total $2,000, the Amount Financed would be $48,000.
Does this mean I will get a smaller loan than I applied for?
No. If your loan is approved in the amount requested, you will receive credit toward your home purchase or refinance for the full amount for which you applied. In the example in the previous question, you would receive a $50,000 loan—not a $48,000 loan.
What is the Total Of Payments?
This figure represents the total amount you will have paid if you make the minimum required payments for the entire term of the loan. This includes principal, interest and mortgage insurance premiums, but does not include payments for real estate taxes or properly insurance premiums.
My disclosure says that if I pay the loan off early, I will not be entitled to a refund of part of the finance charge. What does this mean?
This means that you will be charged interest for the period of time in which you used the money loaned to you. Your prepaid finance charges are generally non-refundable nor is any interest which has already been paid.
What is a Truth In Lending Disclosure and why do I receive it?
The disclosure is designed to give you information about the costs of your loan so that you may compare these costs with those of other loan programs or lenders.
What is the Annual Percentage Rate (APR)?
The Annual Percentage Rate (A.P.R.) is the cost of your credit expressed as an annual rate. Because you may be paying loan discount “points” and other “prepaid” finance charges at closing., the A.P.R. disclosed is often higher than the interest rate on your loan. This A.P.R. can be compared to the A.P.R. on other loan programs to give you a consistent means of comparing rates and programs.
What is the Finance Charge?
The Finance Charge is the cost of credit expressed in dollars. It is the total amount of interest calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the total amount of any required mortgage insurance charged over the life of the loan.
What is the Amount Financed?
The Amount Financed is the loan amount applied for, minus the Prepaid Finance Charges. Prepaid Finance charges include items paid at or before settlement, such as loan origination, commitment or discount fees (“points”), adjusted interest, and initial mortgage insurance premium. The Amount Financed is lower than the amount you applied for because it represents a NET figure. If you applied for $50,000 and the Prepaid Finance Charges total $2,000, the Amount Financed would be $48,000.
Does this mean I will get a smaller loan than I applied for?
No. If your loan is approved in the amount requested, you will receive credit toward your home purchase or refinance for the full amount for which you applied. In the example in the previous question, you would receive a $50,000 loan—not a $48,000 loan.
What is the Total Of Payments?
This figure represents the total amount you will have paid if you make the minimum required payments for the entire term of the loan. This includes principal, interest and mortgage insurance premiums, but does not include payments for real estate taxes or properly insurance premiums.
My disclosure says that if I pay the loan off early, I will not be entitled to a refund of part of the finance charge. What does this mean?
This means that you will be charged interest for the period of time in which you used the money loaned to you. Your prepaid finance charges are generally non-refundable nor is any interest which has already been paid.
