Why two disclosures show different rates?

[immiq]

What is the name of your state?AL
I applied for the fixed mortgage rate loan. The rate is fixed in the Good Faith Estimate of Borrower’s Settlement Costs. Everything is correct including the P & I payment. But the lender gave me another Truth-In-Lending Disclosure For Real Estate Mortgage Loan (Variable Rate Option) listing an Annual Percentage Rate is higher than the fixed mortgage rate. Should the Annual Percentage Rate in the Truth-In-Lending Disclosure be identical to the mortgage rate in the Good Faith Estimate or they can be different? What is the relationship between two rates in two different disclosures? Thank you for your answer.

 

[efflandt]

What you are looking at is probably what I have. It guess it is technically a 1st lien HELOC with fixed rate option. Mine included a free variable rate HELOC that can borrow from paid principal.

However, if you default, the fixed rate may become a higher variable rate.

It was confusing that paperwork for my application showed both fixed rate info and hypothetical variable rate at prime + 3%. They assured me that the rates would be per the cover letter for the fixed rate and variable rate HELOC (prime - 0.5%), and it was correct at closing.

Just make sure that everything is "in writing" to your satisfaction at the closing, BEFORE signing any papers.