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Why is the Annual Percentage Rate (APR) on the Truth in Lending Disclosure higher
than the rate shown on my mortgage note?
The APR rate reflects the cost of your mortgage loan as a yearly rate. This rate
is generally higher than the rate stated on your mortgage note because the APR
includes other costs, such as origination fee, loan discount points, and pre-paid
interest. The APR allows you to compare, in addition to the interest rate, the
total cost of financing your loan, among various lenders.
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