Annual Percentage Rate (APR)
APR is the calculation of the effective interest rate (total cost) that will be attached to the real estate loan. Annual percentage rates include closing costs and other lender fees with the home loan interest rate. APR is the total cost of credit to the consumer that is written as a percentage of the loan amount.
This type of calculation has been instituted in order to make it easier for borrowers to compare mortgage programs and closing costs of different lenders, with just one percentage.
This calculation includes: Points, Loan origination fees, Closing agent fees, and PMI (in applicable loan scenarios.) When applying for a home loan, make sure to pay attention to the APR that is disclosed.
Mortgage lenders also use APR to determine their earnings on a particular home loan. All lenders in the United States are required to disclose APR to their borrower’s as required by the Truth in Lending Act by the department of banking.
Pennsylvania Mortgage Rate | Florida Adjustable Mortgage Rates