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What Is APR for Mortgage Loans?

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What Is APR for Mortgage Loans?

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“APR” stands for annual percentage rate. The APR is a much better indicator than just the interest rate of the actual cost of a mortgage loan, as it estimates what you’ll pay over the course of an entire year. The Federal Truth in Lending law requires mortgage companies to list the APR of their loans google_ad_client = ‘pub-2905054723170537’; // substitute your client_id (pub-number) google_ad_channel = ‘3393335763’; google_ad_output = ‘js’; google_max_num_ads = ‘3’; google_ad_type = ‘text’; google_feedback = ‘on’; google_targeting = “content”; when they advertise an interest rate. This prevents them from advertising unduly low interest rates and tacking on fees and other costs that drive up the real cost of the loan. The APR therefore takes into consideration other fees and costs including: Discount points. Commonly referred to simply as “points,” these are increments of 1 percent of the mortgage that you pay off at the closing. If points are not required, and you elect to pay off poi

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By: AllBusiness.com “APR” stands for annual percentage rate. The APR is a much better indicator than just the interest rate of the actual cost of a mortgage loan, as it estimates what you’ll pay over the course of an entire year. The Federal Truth in Lending law requires mortgage companies to list the APR of their loans when they advertise an interest rate. This prevents them from advertising unduly low interest rates and tacking on fees and other costs that drive up the real cost of the loan. The APR therefore takes into consideration other fees and costs including: Discount points. Commonly referred to simply as “points,” these are increments of 1 percent of the mortgage that you pay off at the closing. If points are not required, and you elect to pay off points to lower your interest rate, it will not be included in the APR. However, if you’re required to pay off points, this cost will be factored in when your APR is calculated. Origination fees. Often confused with points, this is

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