Lana and Vien Tran are purchasing a home for an agreed sales price of $$155,440.$ They have applied for an FHA loan with maximum financing. Making the $3\mathrm{.}5\%$ down payment, then rolling in the $$1,115$ in allowable closing cost and up$-$front MI of $1\mathrm{.}75\%$ makes their loan amount $$153,759.$

A few days before closing, the Tran's were reviewing the Closing Disclosure and noticed the APR was higher than the APR on the LE by $0\mathrm{.}253$ percent.$$

The originally disclosed APR was calculated based on the twenty$-$year loan that the Trans had originally requested. Several weeks before the scheduled closing, the Trans had advised the loan officer that they had changed their minds and now wanted a thirty$-$year loan.$$

The original prepaid finance charges $($closing cost finance charges$)$ originally totaled $$1,400$ because the loan originator had estimated the lender$$s underwriting fee to be $$800$ but the final charge was $$875.$ The original APR stated on the LE was $5\mathrm{.}173$ based on a twenty$-$year term at a $4\mathrm{.}750$ note rate. The final APR stated on the CD was $5\mathrm{.}426$ based on a thirty$-$year term at a $4\mathrm{.}875$ note rate. The final total of prepaid finance charges, points, and fees was $$1,475.$

Vien Tran called the lending officer, who explained what happened. The Tran's were satisfied with the explanation, and the loan closing went as scheduled.