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When I'm shopping around for a 30-year FRM, should I be considering interest rates or APR?

by HGreer_508_241 from Harahan, Louisiana. Oct 12th 2012 Reply


Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

As Phil mentioned, many things go into calculating the APR. The best way to compare offers in my opinion, would be to compare interest rates along with the fees charged by the lender against the interest rate and fees charged by another lender. When you take the APR advertised by a lender, that lender may be under estimating certain cost that influence the APR, thus making it imperfect and inaccurate.

Oct 12th 2012
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Jeremy Redlinger (JeremyR)
#30 ranked lender in Minnesota - 191 contributions

You should be considering both but more importantly you should be considering the bottom line. Compare your new loan amount, monthly principle and interest payment, APR, and closing costs.

Oct 12th 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

If you do a side by side comparison of a mortgage broker quote and a bank quote, both with the same interest rate and the exact same amount of fees, the bank APR will be lower than the broker, even though both deals are exactly the same. This is just how the laws work, so because the APR can be manipulated, i would suggest comparing the interest rate and the total lender fee's to determine which deal is best for you.. 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. 480-287-5714 WilliamAcres.com

Oct 12th 2012
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Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

Great question...you should consider both. And when you shop your loan make sure you campare all of the fees side by side because a big bank like B of A or Wells is going to charge you an origination fee of like a point or point and a half and if you use a local mortgage broker like myself, you will not have that fee because we have what's known as lender paid compensation. That means the lender pays us our contracted rate on every loan and you, therefore, do not.

Oct 12th 2012
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

Both really but can be is hard to get an accurate calculation of APR without quite a bit of info from you. APR is based on the rate and certain lender and legal expenses you have in connection with a mortgage. If you prefer a certain attorney or title company their fees can affect the APR. If you get the rate, also ask for their fees and you essentially have the same info. If the APR is close to the rate it means there are few fees.

Oct 12th 2012
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Kevin Morgan (ArborLending)
#20 ranked lender in Louisiana - 22 contributions

Both. The APR is a great way to compare closing costs between lenders. If the rate is the same but the APR is higher then that lender's costs are higher. If the rate and APR are close then that lender's costs are lower.We are a licensed Louisiana lender with offices in Covington and Metairie 985-867-8334.Thanks,Paul

Oct 12th 2012
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Knowledge is Poiwer. you will see our Office is in Harahan. Come on by , and lets talk.Dan

Oct 12th 2012
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Barrett Stokes (barrett)
#50 ranked lender in Texas - 25 contributions

Good afternoon, the APR is the total overall of your transaction. Of course the APR is not change your monthly payment that is driven by your interest rate.

Oct 12th 2012
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Marilyn Woolfolk (Marilyn)
#69 ranked lender in Washington - 2 contributions

You Have To Look At Both. The APR is an excellent way to compare closing costs between lenders. If the rate is the same but the APR is higher then that means the lender's costs are higher. If the rate and APR are very close then that lender's costs are lower. You Should do a side by side comparison of fees to make that determination.

Oct 12th 2012
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

I would go by the interest rate.

Oct 12th 2012
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