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Why is the APR on the Truth-in-Lending disclosure higher than the rate shown on my mortgage note?

April 26, 2017Apr disclosure mortgage note rate truth-in-lending

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Why is the APR on the Truth-in-Lending disclosure higher than the rate shown on my mortgage note?

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The rate reflected on the APR shows the cost of the credit as a yearly rate. This rate is generally higher than the rate stated on your mortgage note because, in addition to the interest rate, APR includes other costs such as origination fee, loan discount points, pre-paid interest, and mortgage insurance. The APR allows you to compare, in addition to the interest rate, the total cost of financing your loan, among various lenders.