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Is it more important to get a low APR rate or low interest rate? What is the difference between the two?

by vern_f from Long Island, New York. Apr 3rd 2013 Reply


Carlos Figueira (carlosfigueira)
#108 ranked lender in New Jersey - 199 contributions

Most important is your note rate (interest rate) as that is what your payment is based on BUT apr discloses fees associated with loan, so you should choose lowest rate with lowest apr. Equally as important is dealing with an EXPERIENCED loan officer. Call me @ 908-516-2190 or e-mail carlos@keypointmtg.com

Apr 3rd 2013
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Dave Metsker (DaveMetsker)
#36 ranked lender in Oregon - 2,317 contributions

Over a long period, the lower rate is best.

Apr 3rd 2013
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Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

choose the lowest rate - that gives you the lowest payment - apr takes into account closing cost - if I can help you further - email me at NYLOANMAN@aol.com www. HOMEMORTGAGEXPERT.com thank you Peter Savino

Apr 3rd 2013
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

It's really not a Black and White answer. Each loan is different and you need to analyze what is best in your situation. For instance if you are only going to have a loan for 3 years or less you most likely would only want a No Cost loan where the loan officer will raise the rate to cover your fees. By doing this the APR will be comparatively less because there are no fees added onto the loan. If you think you will have your next loan for long term then you most likely will will be better off paying fees to get a lower rate but the APR will be higher because there are fees attached to the loan and that will raise your APR. Determine what your end out goal is with the loan you are getting then make the decision on which is better for you.

Apr 3rd 2013
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James Mazzola (Mazzola)
#110 ranked lender in New Jersey - 313 contributions

Depends? A low rate means a lower payment? A lower APR means lower costs to finance you loan. If you pay points, you will receive a low Rate but higher APR. You just have to see what loan works out better for you: Jim cornoil@comcast.net

Apr 4th 2013
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,246 contributions

I agree with those that say it depends on your circumstances and the reason you are getting the loan. For a refi, or where the borrower is not certain they will own the house for 5-10 years after the loan I generally recommend trying to get the APR as close to the note rate as possible. People refinancing generally don't want to bring cash to closing nor do they want to add significant $ to their balance, so a lender credit to offset the closing costs will make the APR close to the note rate and allow them to effectively start saving money sooner than if they have to "make up" the costs involved in the refinance. Make sense?

Apr 4th 2013
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gary schneider (gschneider47)
#46 ranked lender in New York - 24 contributions

The purpose of showing the apr is to make the consumer aware that there may be additional charges that can be part of your loan such as processing, underwriting and application fee which computes to an additional cost besides the rate for the life of the loan.. I f you are dealing with reputable companies the apr rate should not vary that much from one lender to another. You reside on long island and easily contact someone in your area to go over all you questions. I reside in suffolk county. You can contact me thru e-mail regarding any additional question you have and i will give you my cell number if that works out better for you.

Apr 4th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

The interest rate is what will determine what your monthly payments are. So I would say interest rate is.Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation. Ask for Michelle or Benny We will find the Best Mortgage Option to suit your needs!You can check us out at www.BestMortgageOption.com We are also proud Homes for Heroes affiliates

Apr 4th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,993 contributions

APR is the most misleading, make you obtain the wrong loan while thinking you are getting the right loan item the government makes us show you. I can not tell you the large number of people who made bad loan decisions because of APR. In theory, if lender A quotes you 3.75%, and lender B quotes you 3.75%, who is giving you the better deal? The answer is, you don't know, because you also need to know what closing costs are. That is what APR is trying to tell you. When looking at the SAME RATE, the lowest APR is the better deal. But let say lender A is quoting 3.75%, and lender B is quoting 3.375%. To get the 3.75%, you need to pay $6000 in discount points above and beyond your normal closing costs. YES, the APR is lower... but did you want to pay all that extra money - do you even have that extra money? So is lower or APR better? Contact a local mortgage broker, give them a full application, and let them zero in on your situation and let them quote you the various APR options. www.JoeMetzler.com

Apr 4th 2013
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Private Money / Commercial Money LendingWaikoloa, Hawaii 96738Office Phone: 808-883-2747E-mail: J@KalaLending.comBusiness Description: We offer multiple types of funding starting at $100,000 and up, no maximum: * Commercial Real Estate Loans * Bridge Loans * Multi-Family * Office Buildings * Industrial * *Hotel / Motel Financing * Medical * Assisted/Independent Living * Warehouses * Franchises * Convenience Stores *Restaurants * Project Finance * New Construction * Equipment Leasing * Stock Loans * Portfolio Liquidations * Private Equity * Joint Ventures *Working Capital * Project Finance *Oil and Gas Financing *Renewable Energy Financing * Gold Mines *Churches*Credit Lines *Proof of Funds *Bank Instruments * Bulk REO's * NPN's/PN's

Apr 9th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

The APR is typically a bit higher than the Interest Rate as it adds certain closing costs paid to obtain your loan into the Interest Rate over the term of the loan. You repay your loan based on the Interest Rate so that is what you should focus on initially, but do take into account the closing costs, particularly if you finance those into your new loan!

Apr 3rd 2013
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