AgentMortgage

Why isn’t my real estate loan’s APR locked?

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

"Recently I locked my $100,000 mortgage at an interest rate of 5.75 percent and 1 point, with an APR of 5.94 percent. Now the rate is the same, but I'm told that the APR is 5.99 percent. I don't understand this, how can the rate be locked but not the APR? When I asked the lender about it, he spoke to me like I was an idiot; he said yes, of course, the APR can change...What good is the Truth in Lending statement if the APR can change all the way to closing? I close in two weeks, so I feel like I'm stuck." You are caught up in one of the most perplexing failures of our mortgage disclosure system, one the Federal Reserve could fix easily but doesn't. The annual percentage rate, or APR, is a single summary measure of the cost of the loan to the borrower. The easiest way to think of it is as the interest rate adjusted upward for all upfront fees paid to the lender. The APR of 5.94 percent quoted to you when you locked included fees of about $2,000, whereas the second APR of 5.99 percent ...