Annual Percentage Rate or APR is a more comprehensive measure of the total cost of your mortgage which includes other fees and charges.
It’s common to only look at the interest rate on your mortgage, but their are other mortgage costs as well.
You may have to pay application fees, underwriting fees, discount points, and title fees. The interest rate only measures one component of your mortgage costs, the interest. APR, on the other hand measures more of the costs of your mortgage.
Let’s say you have to mortgage quotes. One has an interest rate of 4.00% and the other has an interest rate of 4.25%. It might be tempting to apply for the 4.00% mortgage, but after a closer look you realize there are $4,000 more in fees that the other lender isn’t charging. Annual Percentage Rate makes it simple to compare these offers apples to apples so you can make a more informed decision.
You can find the APR on the 3rd page of the Loan Estimate. Lenders are required to provide a Loan Estimate after you submit your mortgage application.
You can also find other comparison metrics on the Loan Estimate including the In 5 years numbers, and Total Interest Percentage.
Read more on monthly mortgage mortgage payments here.
Use Bundle to find your mortgage today.
Read more Key Mortgage Terms.