Mortgage Glossary
Annual Percentage Rate (APR)
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Annual Percentage Rate (APR) is the yearly cost of a mortgage expressed as a percentage that folds in the interest rate plus lender fees and points.
What Annual Percentage Rate (APR) means
Because APR includes origination fees, discount points, and certain closing costs, it lets you compare two loan offers on a true cost basis rather than the headline rate alone. A low rate with high fees can carry a higher APR.
Florida example
A Florida lender quoting 6.5% with $8,000 in fees may show a 6.85% APR, while a 6.625% rate with $2,000 in fees lands near 6.72%. Comparing APRs on your Loan Estimates reveals which deal actually costs less.
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