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interest and mortgage "apr" - different or no?

i'm guessing they are diffrent but please explain. the apr is higher so i don't know what i'll really be getting charged. just going off rate tables here, which have all been listing both. is apr just an upfront charge on the mortgage? by facillio.k7842229 from Laurel, Maryland. Sep 26th 2014 Reply


Jay Rosenthal (JayRosenthal)
#62 ranked lender in Maryland - 2 contributions

The interest rate is what your lender has quoted you as the rate being charged. The APR is the Annual Percentage Rate. This is what you are really paying annually. It factors in all of the other costs associated with obtaining the loan to show you what that loan is really costing you annually.

Sep 26th 2014
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Ron Schwartz (RonSchwartz)
#70 ranked lender in Maryland - 56 contributions

APR is NOT what you pay each month. And the way I explain it to my clients is that its supposed to be a way to compare offers for credit. Unfortunately the disclsoure of the APR, while required under federal law, is rarely accurate until a Mortgage Loan is Locked-in and disclsoed to the borrower. So this process is a bit antiquated.I'd recommend that you read the definition of APR under the Federal Truth in Lending law known to us as Regulation Z. My clients normally ask this question and I state that the cost of credit is displayed as the costs of financing a loan over the expected term of the loan. So under a fixed-rate loan its normally slightly higher than the actual rate.There is an excellent explaination here:http://financial-dictionary.thefreedictionary.com/Regulation+Z

Sep 26th 2014
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Jason Vondrak (jvondrak)
#3 ranked lender in California - 1,715 contributions

The APR stands for the annual percentage rate, which is what you will really be paying with all of the lender's fees rolled into the loan.

Sep 26th 2014
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,933 contributions

The government mandates that certain charges to a borrower are to be considered prepaid interest and not really a loan charge.. but the rules are different for brokers vs. bankers.. Banks are not required to show you every dollar they receive for doing your loan, where brokers are.. and because of the difference in rules, the apr for a brokered deal can be higher than the bank, but the broker deal could actually be a better deal for you.. for this reason, you really cannot rely on the apr to determine if one deal is better than the other.. it's best if you do a side by side comparison of the actual fees and interest rate.. simple accounting .. money in, money out, will tell you which loan is better. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Sep 27th 2014
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,107 contributions

The APR is a tool designed to give you a quick and consistent means of comparing the cost of your loan compared to the cost of other similar loan programs from other lenders. The higher the APR the higher the fees associated with that loan. However, this only works if you are comparing apples to apples. The interest rate is completely different and is what your monthly payment is based on. Best wishes, Sean

Sep 29th 2014
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