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ESTATE LAWYER |
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Annual Percentage Rate
This is not the Note rate for which the borrower
applied. The Annual Percentage Rate (APR) is the cost of the
loan in percentage terms taking into account various loan
charges of which interest is only one such charge. Other charges
which are used in calculation of the Annual Percentage Rate
are Private Mortgage Insurance or FHA Mortgage Insurance Premium
(when applicable) and Prepaid Finance Charges (loan discount,
origination fees, prepaid interest and other credit costs).
The APR is calculated by spreading these charges over the
life of the loan which results in a rate higher than the interest
ate shown on your Mortgage/Deed of Trust Note. If interest
was the only Finance Charge, then the interest rate and the
Annual Percentage Rate would be the same.
Prepaid Finance Charges
Prepaid Finance Charges are certain charges
made in connection with the loan and which must be paid upon
the close of the loan. These charges are defined by the Federal
Reserve Board in Regulation Z and the charges must be paid
by the borrower. Non-inclusive examples of such charges are:
Loan origination fee, “Points” or Discount, Private
Mortgage Insurance or FHA Mortgage Insurance, Tax Service
Fee. Some loan charges are specifically excluded from the
Prepaid Finance Charge such as appraisal fees and credit report
fees.
Prepaid Finance Charges are totaled and then
subtracted from the Loan Amount (the face amount of the Deed
of Trust/Mortgage Note). The net figure is the Amount Financed
as explained below.
Finance Charge
The amount of interest, prepaid finance charge
and certain insurance premiums (if any) which the borrower
will be expected to pay over the life of the loan.
Amount Financed
The Amount Financed is the loan amount applied
for less the prepaid fiancé charges. Prepaid finance
charges can be found on the Good Faith Estimate/Settlement
Statement (HUD-1 or 1A). For example, if the borrower’s
note is for $100,000 and the Prepaid Finance Charges total
$5,000, the Amount Financed would be $95,000. The Amount Financed
is the figure on which the Annual Percentage Rate is based.
Total of Payments
This figure represents the total of all payments
made toward principal, interest and mortgage insurance (if
applicable) over the life of the loan.
Payment Schedule
The dollar figures in the Payment Schedule
represent principal, interest, plus Private Mortgage Insurance
(if applicable) over the life of the loan. These figures will
not reflect taxes and insurance escrows or any temporary buydown
payments contributed by the seller.
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For more
information or if you are looking for a real
estate lawyer in Massachusetts, please contact Rob D. Stewart. If you prefer,
you can also telephone our offices in Boston seven days a
week at toll free 866-414-0400.
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lawyers in Massachusetts towns and areas including Acton, Amesbury,
Andover, Arlington,
Ashland, Athol, Bedford, Belmont,
Bolton, Boston, Boxborough, Boxford, Boylston, Braintree, Brookline,
Burlington, Cambridge,
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Cod, Carlisle, Charlestown, Chelmsford, Chelsea,
Clinton, Concord, Danvers, Dedham, Dudley, Duxbury, Essex, Fitchburg,
Foxboro, Framingham, Franklin, Gloucester, Hamilton, Hanover,
Haverhill, Holbrook, Holliston, Hopkinton, Hudson, Ipswich,
Kingston, Lakeville, Lawrence, Leominster, Lexington, Lincoln,
Lowell, Lynn, Lynnfield, Malden,
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Reading, Rockport, Rowe, Rowley, Salem, Saugus, Sherborn, Somerville,
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Wayland, Wellesley,
West Newbury, Westborough, Westford, Weston,
Westport, Wilmington, Winchester, Woburn, Worcester. Parker
Scheer also provides referral services to real estate attorneys
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