The Truth in Lending Act requires specific disclosures relative to the costs applied to financing a home. It is ironic that the documents prepared for borrowers to explain and clarify the numbers in the loan process seem to confuse borrowers more often than not.
"The Language of Real Estate" by John Reilly:
"The finance charge and the annual percentage rate (APR) are the two most important disclosures required. They provide a quick reference for consumers, informing them how much they are paying for credit and its relative cost in percentage terms."
The APR number is higher than the interest rate that is quoted because it factors other loan costs.... more