Question from a client during a signing:

The form “Itemization of amounts financed (IAF)” is a page in which the summary of charges in connection with making your loan are itemized. Why is it that some of these itemized fees are different than on the Settlement Statement?

Answer:

The fees on the IAF form are the Annual Percentage Rate (APR) effective fees. At the time that the lender draws the documents, they do not know the EXACT fees. The fees on the loan application form (commonly referred to as the “1003″) are also just estimates. These fees can be over disclosed, but not under disclosed with the exception of those fees that are not APR effective which are often located on the bottom section of the IAF.

APR effective fees are those that influence the annual percentage rate. The APR is disclosed on the separate Truth in Lending document.