7% rate and 5.792% APR? How??

Question

This is a 7 year ARM, but I don't understand how the APR can be less than the rate, and SO much less. Usually the APR is higher becuase closing costs are rolled in.

Answer 1

The 7% is your net rate after paying the fees that go along with the loan. The 5.792% is your rate before fees.

Answer 2

Agreed, it makes no sense.  I think it must be a typo or something (unless they are giving you 10% of the loan amount back just to have your business - if thats the case let me know where this is, I want one of those 10% back loans too).