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Replies (14)
You still have the monthly mortgage insurance which will make the APR higher on an FHA mortgage.
Read this and it will explain exactly what the numbers on the TIL mean.
Truth in Lending Explained
Read this and it will explain exactly what the numbers on the TIL mean.
Truth in Lending Explained
- Clay Branch, "Georgia Loans"
- Contributions:7835
My APR would be 4.494% if you are not paying any closing costs, the elevated rate is due to mortgage insurance.
If you are not paying the UFMIP, then my APR is 4.403%.
If you are not paying the UFMIP, then my APR is 4.403%.
- mail4deal
- Contributions:16
Thanks Brown and clay,
Based on your responses I realized the total MIP for 30 yrs and the total pre-paids..gets me to the 4.4% APR.
Thanks again
Based on your responses I realized the total MIP for 30 yrs and the total pre-paids..gets me to the 4.4% APR.
Thanks again
- Clay Branch, "Georgia Loans"
- Contributions:7835
1. On the TIL the amount financed is lower than what is the starting balance of the new refinanced loan shown in the amortization schedule. Can anyone clarify on that.
I assume your loan officer is using Calyx. Even though you are getting a credit for the closing costs, or at least the PFC's, if the originator does not check the PFC box next to the lender credit the amount financed will be much lower. It also happens in that software when you are not getting a lender credit, if you were rolling the closing costs into the loan amount the same thing happens as it subtracts the closing costs from the loan amount, then shows that as amount financed. I called them about 10 years ago about that exact issue, I talked to 3 different people and never got a sane explanation. BTW, good catch on READING everything, but you will have to just ignore that as the loan originator will not be able to use a different software.
I assume your loan officer is using Calyx. Even though you are getting a credit for the closing costs, or at least the PFC's, if the originator does not check the PFC box next to the lender credit the amount financed will be much lower. It also happens in that software when you are not getting a lender credit, if you were rolling the closing costs into the loan amount the same thing happens as it subtracts the closing costs from the loan amount, then shows that as amount financed. I called them about 10 years ago about that exact issue, I talked to 3 different people and never got a sane explanation. BTW, good catch on READING everything, but you will have to just ignore that as the loan originator will not be able to use a different software.
- Clay Branch, "Georgia Loans"
- Contributions:7835
Based on your responses I realized the total MIP for 30 yrs and the total pre-paids..gets me to the 4.4% APR.
the monthly MI should only be showing for about 115 payments, not 360, and prepaids are not counted in the APR.
the monthly MI should only be showing for about 115 payments, not 360, and prepaids are not counted in the APR.
- mail4deal
- Contributions:16
monthly MIP shows up for 76 months based on the appraised value.
Using some online APR calculators I figured the sum of MIP and prepaids was getting me to the 4.4%. but if you say that the prepaids are not counted towards APR then I still need to figure out where the $6500 is coming from.
Using some online APR calculators I figured the sum of MIP and prepaids was getting me to the 4.4%. but if you say that the prepaids are not counted towards APR then I still need to figure out where the $6500 is coming from.
- Clay Branch, "Georgia Loans"
- Contributions:7835
If your monthly MI stops at 76 months ( on the AM schedule ), then it sounds like you have just over 2 points in closing costs in the APR. Did you say the lender is paying all closing costs including the UFMIP? Have you received a Good Faith Estimate or a worksheet?
- mail4deal
- Contributions:16
No I am paying all the closing costs (escrows/settlement/govt recording fees) including the UFMIP. Yes I have a GFE and worksheet from him.
- Clay Branch, "Georgia Loans"
- Contributions:7835
Dropping the monthly MI at 76 months will indicate a loan to value of just over 89%. Not all fees are counted in the APR and if you are getting a 4.4 APR then that APR includes 1 point for the UFMIP plus another point in PFC's so 2 points are being counted in the APR in addition to the monthly MI..
- mail4deal
- Contributions:16
quite a bit confusing this APR calculation.
Thanks clay
Thanks clay
If I were you I would ignore the APR. It sounds as if you have a good rate and you seem to be comfortable wit the terms; therefore the APR is irrelevant.
- mail4deal
- Contributions:16
Very true but after corresponding with several lenders I have learnt my lesson to understand what is being presented. I had several other lenders who offered me the same rate of 3.75, but despite me specifying that I would pay for all closing costs (UFMIP included) I was being tricked into other mechanisms that actually ended up on my loan and inflated the APR.
As far as I understand the MIP for 30 years and the PCF`s should contribute towards my APR not the lender charging 2% origination charge and showing be 2K in lender credits. I think it is highly misguiding and probably the trick of the trade.
As far as I understand the MIP for 30 years and the PCF`s should contribute towards my APR not the lender charging 2% origination charge and showing be 2K in lender credits. I think it is highly misguiding and probably the trick of the trade.
"As far as I understand the MIP for 30 years and the PCF`s should contribute towards my APR not the lender charging 2% origination charge and showing be 2K in lender credits. I think it is highly misguiding and probably the trick of the trade."
Unfortunately, this is how it is supposed to be disclosed as crazy as it sounds. On the GFE, it will show the 2 points as an origination and then as a credit. The GFE is extremely confusing and I always believed as of January 1, 2010 when they changed it, that it's borderline fraudulent how lender paid compensation is disclosed on the GFE by a broker. It's not the fault of the broker however, you can blame HUD.
Unfortunately, this is how it is supposed to be disclosed as crazy as it sounds. On the GFE, it will show the 2 points as an origination and then as a credit. The GFE is extremely confusing and I always believed as of January 1, 2010 when they changed it, that it's borderline fraudulent how lender paid compensation is disclosed on the GFE by a broker. It's not the fault of the broker however, you can blame HUD.
- mail4deal
- Contributions:16
Another question as far the MIP is concerned on what basis is the LTV determined. Since there is no appraisal.. what is the value in this scenario?
FHA refinance- Amount financed and amortization schedule
I am in the process of a FHA streamline refi. A few questions on that:
1. On the TIL the amount financed is lower than what is the starting balance of the new refinanced loan shown in the amortization schedule. Can anyone clarify on that.
2. I am taking on all closing costs including the upfront MIP and not including anything on the refinanced loan. Shouldn`t this make the APR lower or closer to the interest rate? Int rate is 3.75 and APR is 4.4.
Thanks
AH
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