The lender is required, usually, within three days of receiving your application, to give you or place in the mail to you a Truth-in-Lending statement that will disclose the "annual percentage rate" (APR). The APR reflects the cost of your mortgage loan as a yearly rate. This rate may be higher than the rate stated in your mortgage or deed of trust note because the APR includes, in addition to interest, loan discount or points (as defined in Item 802 of the Section of this information which discusses each specific settlement service), fees, and other credit costs. The Truth-in-Lending statement also discloses other useful information, such as the finance charge, schedule of payments, late payment charges, and whether or not additional charges will be assessed if you pay off the balance of your loan before it is due (prepayment penalty).

Some of the information that the lender is required to disclose may not be certain at the time the lender is required to give you the Truth-in-Lending statement. If so, the lender will indicate that the uncertain disclosures are estimates. Should the actual APR differ by more than a small amount from the lender?s estimate, the lender must give you a new Truth-in-Lending statement no later than at settlement. However, if the estimated APR proves to be correct, the lender need not to give you a new Truth-in-Lending statement, even if other disclosures have changed. For this reason, you may want to ask the lender shortly before settlement if all the Truth-in-Lending disclosures are still accurate. For more detailed information the Truth-in-Lending, contact the Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551.

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